Top 5 Companies With A Low PE Ratio

Price to Earnings or the PE ratio holds an important place when it comes to the valuation of a company. In this article, we will be looking at the top 5 companies having a low PE ratio as per their FY13 earnings. We have taken companies that have a market capitalisation, PAT and equity capital of more than Rs 100 crore.

Cairn India: Cairn India, an independent oil and gas exploration and production company, engages in surveying, prospecting, acquiring, drilling and exploring of oils, petroleum, gas, and related by-products in India. It holds interests in various oil and gas blocks/fields located in the Krishna-Godavari basin, the Rajasthan onshore basin, the Mumbai offshore basin, the Palar-Pennar basin, and the Cambay offshore basin in India; Mannar basin, Sri Lanka; and Orange Basin, South Africa. The company was incorporated in 2006 and is based in Gurgaon, India. Cairn India is a subsidiary of Vedanta Resources Plc.

With a market capitalisation of Rs 54757 crore, the company has secured the top spot in this list, with a PE of 4.54x. The FY13 PAT stands at Rs 12056.39 crore.

Firstsource Solutions: Firstsource is an innovative provider of customer-centric business process services. With a network of 47 delivery centers spread across US, UK, Philippines, India and Sri Lanka, Firstsource provides consulting services with outsourcing solutions to organisations in the Healthcare, Communication, Publishing, Banking, Financial Services and Insurance industries. Its client base includes over 100 global clients including 21 Fortune 500 and 9 FTSE 100 companies.

On a consolidated basis, Firstsource has posted a net profit of Rs 146.59 crore as of FY13 and trades at a PE of 5.64x. The market capitalisation stands at Rs 827 crore and the stock has yielded positive returns of 4.14% on a YTD basis.

IRB Infrastructure Developers: IRB Infrastructure Developers was incorporated to fund the capital requirements of the IRB Group initiatives in the infrastructure sector. The company undertakes development of various infrastructure projects in the road sector through several Special Purpose Vehicles. IRB, along with its subsidiaries, has constructed or operated and maintained around 8,000 lane kms of road length so far and is one of the major road developers in the country.

With a market capitalisation of Rs 3172 crore, the company has secured the third spot here and is currently trading at a PE of 4.54x. The FY13 PAT stands at Rs 556 crore. The stock has yielded negative returns of 26.58% on a YTD basis.

Arvind Limited: Arvind Limited, a textile company, manufactures cotton shirting, denim, knits and bottom weights, fabrics, jeans, and garments. Additionally, it offers engineering procurement and construction services for water, wastewater treatment, and recycling projects. The company also operates apparel value retail stores under MEGAMART brand name and specialty retail stores under the licensing arrangement with international brands of Debanhams & Next. Arvind Limited was founded in 1931 and is based in Ahmedabad.

The company trades at a PE of 7.58x on its FY13 earnings and the PAT stands at Rs 248 crore. The market capitalisation stands at Rs 1884 crore. The stock has yielded negative returns of 28.86% on a YTD basis.

JSW Energy: The company was one of the earliest private entrants into the power sector after liberalisation in the 1990s. By managing operations, enhancing social and economic benefits, minimising environmental impact and employing cutting age innovation, JSW Energy has consolidated its place at the top of the ranks. One of India’s premier integrated power companies, JSW Energy produces 3,140MW of power, with a capacity of another 8,630MW under implementation and development. Its vision is to achieve the 11,770MW mark in power generation.

On a consolidated basis, JSW Energy has posted a net profit of Rs 903.65 crore as of FY13 and it trades at a PE of 8.20x. The market capitalisation stands at Rs 7396 crore and the stock has yielded negative returns of 34.45% on a YTD basis.