Low PE Stocks In Nifty 50

The table below highlights low PE stocks in the Nifty 50, based on market capitalisation and 1-year returns. Key performers include REC Limited with an 89.01% return and a PE ratio of 9.76, Adani Power with an 83.08% return and a PE ratio of 14.70 and Coal India with a 55.29% return and a PE ratio 8.64. Other strong contenders are Hindalco Industries with a 55.34% return, Tata Motors with 36.15% and State Bank of India with 43.26%, showcasing attractive valuations and solid returns in the past year.

The table below shows the low pe stocks in nifty 50 based on the highest market capitalisation and 1-year return.

Introduction to Lowest PE Ratio Stocks Nifty 50

State Bank of India

The Market Cap of the State Bank of India is Rs. 723,831.31 crores. The stock’s monthly return is 3.53%. Its one-year return is 43.26%. The stock is currently 11.17% away from its 52-week high.

The State Bank of India is a banking and financial services provider headquartered in India. The company offers a diverse range of products and services to individuals, commercial enterprises, corporations, public bodies and institutional customers. 

Its operations are divided into segments such as Treasury, Corporate/Wholesale Banking, Retail Banking, Insurance Business and Other Banking Business. The Treasury segment focuses on investment and trading in foreign exchange and derivative contracts. The Corporate/Wholesale Banking segment includes lending activities for corporate accounts, commercial clients and stressed assets resolution.  

Life Insurance Corporation Of India

The Market Cap of Life Insurance Corporation Of India is Rs. 590,185.54 crores. The stock’s monthly return is -8.88%. Its one-year return is 46.86%. The stock is 30.71% away from its 52-week high.

Life Insurance Corporation of India (LIC) is an insurance company headquartered in India that provides life insurance services both domestically and internationally. LIC offers a variety of insurance solutions for individuals and groups, including participating, non-participating and unit-linked options. 

The company’s product portfolio includes a range of insurance and investment products such as protection, pension, savings, investment, annuity, health and variable products. LIC is organized into different segments such as Life Individual, Participating Pension Individual, Participating Annuity Individual, Non-Participating Life, Non-Participating Pension, Non-Participating Annuity Individual, Non-Participating Variable Individual, Non-Participating Health Individual and Non-Participating Unit Linked. 

Axis Bank Ltd

The Market Cap of Axis Bank Ltd is Rs. 350,144.99 crores. The stock’s monthly return is -8.03%. Its one-year return is 20.55%. The stock is 11.93% away from its 52-week high.

Axis Bank Limited, an India-based company, provides a range of banking and financial services through its segments including Treasury, Retail Banking, Corporate/Wholesale Banking and Other Banking Business. The Treasury segment involves investments in various assets, trading operations and foreign exchange activities. 

Retail Banking offers a variety of services such as liability products, cards, online and mobile banking, ATM services, financial advisory and services for non-resident Indians. Corporate/Wholesale Banking provides services to corporate clients including advisory services, project appraisals and capital market support.  

Tata Motors Ltd

The Market Cap of Tata Motors Ltd is Rs. 328,197.23 crores. The stock’s monthly return is -8.80%. Its one-year return is 36.15%. The stock is 29.54% away from its 52-week high.

Tata Motors Limited is a worldwide car manufacturer with a broad product lineup that includes cars, SUVs, trucks, buses and military vehicles. The company is divided into segments focusing on automotive operations and other activities. 

Within the automotive segment, there are four sub-segments: Tata Commercial Vehicles, Tata Passenger Vehicles, Jaguar Land Rover and Vehicle Financing. The company’s other operations involve IT services, machine tools and factory automation solutions.

Coal India Ltd

The Market Cap of Coal India Ltd is Rs. 301,912.06 crores. The stock’s monthly return is 0.09%. Over the past year, it has achieved a return of 55.29%. The stock is currently 10.43% below its 52-week high.

Coal India Ltd., an Indian coal mining company, operates in 83 mining areas across eight states in India through its subsidiaries. The company oversees a total of 322 mines, comprising 138 underground, 171 opencast and 13 mixed mines, as well as various facilities like workshops and hospitals. 

Additionally, Coal India Ltd. has 21 training Institutes and 76 Vocational Training Centers. The company also runs the Indian Institute of Coal Management (IICM), a corporate training institute offering multi-disciplinary programs.  

Adani Power Ltd

The Market Cap of Adani Power Ltd is Rs. 234,926.15 crores. The stock’s monthly return is -8.31%. Its one-year return is 83.08%. The stock is currently 46.52% away from its 52-week high.

Adani Power Ltd, a part of the Adani Group, is one of India’s largest private thermal power producers. Established in 1996, the company operates several thermal power plants across India, with a combined installed capacity of over 12,000 MW. 

It focuses on generating electricity through coal-based power plants and is also exploring renewable energy projects. Adani Power plays a critical role in meeting India’s growing energy needs, contributing significantly to the country’s power infrastructure and economic development.

Hindalco Industries Ltd

The Market Cap of Hindalco Industries Ltd is Rs. 164,401.61 crores. The stock’s monthly return is 7.90%. Its one-year return is 55.34%. The stock is 2.54% away from its 52-week high.

Hindalco Industries Limited, an India-based leading metals company, is involved in the production and global distribution of aluminium, copper and related products. The company operates in four main segments: Novelis, Aluminium Upstream, Aluminium Downstream and Copper. 

Novelis focuses on manufacturing and selling aluminium sheet and light gauge products across North America, South America, Europe and Asia. The company’s upstream activities include bauxite and coal mining, alumina refining, metal production and power generation. Its downstream operations involve the production of value-added aluminium products like flat rolled items, extrusions and foils. The Copper Segment encompasses the production of copper cathode, copper rods, precious metals and di-ammonium phosphate.  

REC Limited

The Market Cap of REC Limited is Rs. 142,812.90 crores. The stock’s monthly return is -2.43%. Its one-year return is 89.01%. The stock is 19.73% away from its 52-week high.

REC Limited is an India-based company specializing in infrastructure financing. The company provides interest-bearing loans to various entities involved in the power sector, including state electricity boards, state power utilities and private companies across different segments of power infrastructure. 

REC Limited operates in a single business segment, focusing on lending to the power, logistics and infrastructure sectors. Its range of financial products includes long-term loans, medium-term loans, short-term loans, debt refinancing, equity financing and financing for equipment manufacturing in the power industry. The company also offers funding for coal mines and supports projects related to renewable energy.  

Punjab National Bank

The Market Cap of Punjab National Bank is Rs. 117,756.70 crores. The stock’s monthly return is -5.38%. Its one-year return is 39.18%. The stock is 38.38% away from its 52-week high.

Punjab National Bank (PNB) is a bank headquartered in India. It operates through various segments including Treasury Operations, Corporate/Wholesale Banking, Retail Banking and Other Banking Operations. The bank offers a range of products including personal, corporate, international and capital services. Personal products encompass deposits, loans, housing projects, NPA settlement options, accounts, insurance, government services, financial inclusion and priority sector services. 

Corporate offerings include loans, forex services for exporters/importers, cash management and a gold card scheme for exporters. The international product line features an FX retail platform, LIBOR transition services, various schemes/products, NRI services, forex assistance, travel cards, foreign office contacts, a trade finance portal and outward remittance services.  

IndusInd Bank Ltd

The Market Cap of Indusind Bank Ltd is Rs. 104,957.63 crores. The stock’s monthly return is -7.90%. Its one-year return is -5.15%. The stock is 25.77% away from its 52-week high.

IndusInd Bank Limited is involved in providing a variety of financial services to individuals and businesses. The bank offers a diverse range of financial products, including microfinance, personal loans, vehicle loans, credit cards and loans for small to medium enterprises (SMEs). The bank operates through different segments, namely Treasury, Corporate/Wholesale Banking, Retail Banking and Other Banking Operations. 

The Treasury segment encompasses various investment portfolios, foreign exchange transactions, equities, derivatives and money market operations. The Corporate/Wholesale Banking segment deals with lending and deposits for corporate clients and tracks the segment’s earnings and expenses. The Retail Banking segment focuses on lending and deposits for retail customers and includes earnings and expenses tracking.  

What Is the PE Ratio?

The price-to-earnings (PE) ratio is a financial metric used to evaluate a company’s valuation by comparing its current share price to its earnings per share (EPS). This ratio indicates how much investors are willing to pay for each dollar of earnings, helping assess if a stock is overvalued or undervalued.  

A higher PE ratio may suggest that a company’s stock is expensive compared to its earnings, or it could indicate strong future growth expectations. Conversely, a lower PE ratio might imply that the stock is undervalued or that investors are expecting lower growth in the future.

Features Of Low PE Stocks In Nifty 50

The key features of low PE stocks in Nifty 50 include their relatively undervalued status, as they are priced lower in relation to their earnings. This makes them attractive to value investors looking for growth potential at a lower cost.

1. Undervaluation: Low PE stocks are considered undervalued by the market. This means they are priced lower compared to their earnings, offering investors the potential to benefit from price corrections as the stock’s true value is realized.
2. Strong Earnings Potential: These stocks typically demonstrate solid earnings performance. A low PE ratio, combined with stable or increasing earnings, indicates that the company has the potential for future growth, making it appealing for long-term investment.
3. Lower Risk: Low PE stocks are often viewed as less risky compared to high PE stocks. Since they are priced lower relative to their earnings, they provide a cushion against significant price drops, especially during market downturns.
4. Attractive Dividend Yields: Many low PE stocks tend to offer higher dividend yields, as their prices are lower relative to their earnings. This provides investors with an additional income stream, enhancing the total return from these investments.
5. Favourable for Value Investors: Low PE stocks are typically favoured by value investors who seek to purchase quality companies at a bargain. These investors believe that the market has mispriced the stock, offering an opportunity for future appreciation.

PE Ratio Of Nifty 50 Stocks​ Based on 6-Month Return.

The table below shows the PE ratio of nifty 50 stocks​ based on a 6-month return.

Lowest PE Ratio Stocks Nifty 50 Based on 5-Year Net Profit Margin

The table below shows the lowest PE ratio stocks nifty 50 based on a 5-year net profit margin.

Low PE Stocks In Nifty 50 Based on 1M Return

The table below shows the low pe stocks in nifty 50 based on a 1m return.

High Dividend Yield Low PE Stocks In Nifty 50

The table below shows the high dividend yield and low PE stocks in nifty 50.

Historical Performance of Low PE Stocks In India

The table below shows the historical performance of low-pe stocks in India based on  5-year CAGR.

Factors To Consider When Investing In Low PE Stocks

The factor to consider when investing in low PE stocks is the reason behind the stock’s undervaluation. A low PE ratio could signal growth potential, but it may also indicate underlying risks or challenges that need further analysis.

1. Company Fundamentals: Always review a company’s fundamentals, such as revenue growth, profitability and debt levels. A low PE may be appealing, but strong financial health is essential to ensure the stock is undervalued and not facing long-term issues.
2. Sector Performance: Analyze the performance of the sector the company operates in. A stock may have a low PE because of challenges in its industry, which could affect future growth prospects and lead to continued undervaluation.
3. Earnings Consistency: Check if the company has consistent earnings growth. A low PE stock with stable or growing earnings is more likely to recover in value, providing better returns to investors in the long run.
4. Market Sentiment: Consider the broader market sentiment toward the stock. Sometimes a stock may have a low PE due to negative investor perception, which can be slow to shift despite improvements in company performance.
5. Dividend Yields: Many low PE stocks offer higher dividend yields, making them attractive for income-seeking investors. However, assess the company’s ability to sustain these dividends by analyzing cash flow and profitability.

How To Invest In Low PE Stocks In Nifty 50?

Investing in low PE stocks within the Nifty 50 can be a strategic move for value investors. Start by identifying Nifty 50 companies with a low price-to-earnings ratio, indicating potential undervaluation. Analyze their financials for growth prospects and market position. Diversifying your portfolio is essential to mitigate risks. Utilize brokerage platforms like Alice Blue, which offers tools and insights to facilitate informed decision-making.  

Impact of Government Policies on Low PE Stocks In India

Government policies significantly influence low PE stocks in India, especially in sectors like energy, banking and infrastructure. Favourable policies, such as tax incentives, subsidies, or reforms, can help improve a company’s profitability and growth prospects, which may lead to a reevaluation of the stock and an increase in its price, reducing the PE ratio over time.

On the other hand, restrictive policies, such as increased regulation, higher taxes, or industry-specific interventions, can negatively impact company earnings. This could keep low PE stocks undervalued for longer periods, affecting investor sentiment and reducing potential returns.

How Low PE Stocks Perform in Economic Downturns?

Investors often look to these stocks as potentially undervalued opportunities. In challenging economic periods, low PE stocks may exhibit resilience due to their perceived bargain pricing, attracting value-oriented buyers seeking safer investments. 

However, their performance can be mixed, as the underlying business fundamentals become critical. Companies with low PE ratios may still face significant risks, including reduced earnings and sluggish growth, which could ultimately lead to disappointing returns. Thus, while they can offer promise, caution is advisable.

Advantages Of Investing In Low PE Stocks NSE

The primary advantage of investing in low PE stocks on the NSE is that they are typically undervalued, allowing investors to purchase them at a lower price relative to their earnings, with the potential for price appreciation over time.

1. Potential for High Returns: Low PE stocks often represent companies that are undervalued by the market. As these stocks correct and align with their true value, investors can benefit from significant price appreciation, offering higher returns over time.
2. Lower Risk of Overvaluation: Investing in low PE stocks minimizes the risk of overpaying for a stock. Since they are priced lower relative to earnings, they offer a margin of safety against potential market corrections.
3. Higher Dividend Yields: Low PE stocks typically offer higher dividend yields due to their lower price. This provides investors with a regular income stream, making them attractive for those seeking both capital appreciation and income.
4. Value Investing Appeal: Low PE stocks are attractive to value investors who look for quality companies trading below their intrinsic value. These stocks have the potential for long-term growth as the market corrects its valuation.
5. Defensive in Downturns: During market downturns, low PE stocks may perform better than high PE stocks, as they are already priced conservatively. This defensive characteristic makes them less vulnerable to sharp price declines.

Risks Of Investing In Low PE Stocks In Nifty 50

The main risk of investing in low PE stocks in the Nifty 50 is that a low PE ratio might indicate underlying problems within the company, such as poor growth prospects or market challenges, rather than undervaluation.

1. Weak Growth Potential: Low PE stocks may reflect companies with limited growth opportunities. Even though they seem undervalued, the market may have priced them low due to stagnating revenues or declining profitability, reducing future return potential.
2. Sector-Specific Challenges: Some low PE stocks belong to sectors facing long-term difficulties or regulatory pressures. If the sector struggles to recover or grow, the stock may remain undervalued for extended periods, affecting overall returns.
3. Volatility and Market Sentiment: Market sentiment can keep low PE stocks suppressed, even if fundamentals improve. Negative perceptions or investor scepticism may prevent the stock from realizing its full value, leading to prolonged periods of underperformance.
4. Dividend Sustainability: While low PE stocks may offer higher dividends, there’s a risk that these companies may struggle to maintain payouts during tough economic periods, particularly if earnings don’t improve, impacting the stock’s attractiveness.
5. Misleading Valuation: A low PE ratio might give the impression of value, but in some cases, it reflects deeper issues within the company, such as declining market share or poor management, posing risks for long-term investors.

Low PE Stocks NSE GDP Contribution

Low PE stocks on the NSE contribute significantly to India’s GDP, as they represent companies from key sectors such as banking, energy and infrastructure. These sectors are vital for economic growth, driving employment, investment and production. Companies with low PE ratios often reflect stable and mature businesses that contribute consistently to GDP through their operations.

Additionally, as these companies grow and expand, their impact on the economy increases. By generating revenue, creating jobs and investing in infrastructure, low PE stocks help sustain economic development, making them crucial contributors to India’s overall GDP growth.

Who Should Invest in Low PE Stocks In Nifty 50?

Investing in low PE stocks in the Nifty 50 is ideal for value investors seeking opportunities to buy quality companies at lower valuations, with the potential for significant future returns as the market re-evaluates its true worth.

1. Long-Term Investors: Those with a long-term investment horizon may benefit from low PE stocks, as these companies often recover over time, offering substantial capital appreciation when the market corrects undervaluations.
2. Value Investors: Investors who focus on buying undervalued stocks with strong fundamentals can find good opportunities in low PE stocks, which offer potential for significant returns as they align with their intrinsic value.
3. Income-Oriented Investors: Many low PE stocks tend to offer higher dividend yields, making them suitable for investors seeking a regular income stream, along with the possibility of price appreciation in the long run.
4. Risk-Averse Investors: Investors who prefer lower risk may find low PE stocks appealing, as they are less likely to be overvalued. This offers some protection against sharp market corrections, compared to high PE growth stocks.
5. Market Participants Seeking Stability: Low PE stocks often represent mature, stable businesses with consistent earnings. These stocks are typically less volatile, making them attractive for investors seeking steady returns with reduced exposure to market swings.

Low PE Ratio Stocks To Buy – FAQs

We hope you’re clear on the topic, but there’s more to explore in stocks, commodities, mutual funds, and related areas. Here are important topics to learn about.

Disclaimer: The above article is written for educational purposes and the companies’ data mentioned in the article may change with respect to time. The securities quoted are exemplary and are not recommendatory.