Introduction – Best Share to Buy Below ₹50
Share market is the gameplay that everybody does not master but once you do you will not regret it. Bringing diversification to your portfolio is important to help you meet your financial goals and you never know which stock’s performance is leading the portfolio. Some of these companies offer you their best shares for less than ₹50, but the return on investments in these stocks is just tremendous.
By focusing on these undervalued yet high-quality equities that are present in the share market, the investor uses the concept of value investing. This method of investing signifies that each share’s price has true worth which is not attained by the respective stock. The value investors choose the company share that has the most potential for growth after thoroughly examining these company shares.
With this write-up, we’re going to tell about the best shares to buy below ₹50 in 2022, the parameters to check these stocks and the important points to note while investing in them.
Parameters before investing in the Stocks below ₹50
Though the worth of these stocks is less than ₹50 that does not mean that the potential of these stocks is any less than the other top-performing stocks. Here are two ratios which are suggested by experts to see if the best shares under ₹50 are worth making an investment in or not.
1. P/E Ratio or the Price to Earnings Ratio
Before deciding to invest in any company, you should look at its P/E ratio. A company’s P/E ratio shows the relationship between the capital it has raised through issuing equity shares to investors and the company’s initial share price.
Investors can evaluate the company’s current share performance using the P/E ratio. The better the company’s condition, the lower the P/E ratio.
2. P/B Ratio or the Price to Book Ratio
Another aspect that defines value stocks is the price-to-book ratio. It shows the relationship between the company’s current share price and its book value (the total amounts of company assets divided by the total number of company stocks released in the market).
The P/B ratio can be used to assess the company’s present financial situation. We can classify the company’s equities as undervalued stocks if their current market value is less than their book value (if the company is not going through an economic crisis).
The Top 5 Stocks under ₹50
2022 has been the year of volatility and unpredicted stock market movement. But wait, here are certain stocks whose worth will be realized with time. Here is the list of most active shares below ₹50 in 2022 for you.
|S. No.||Stock List||P/E Ratio||Stock Price|
|1||Bank of Maharashtra||8.7||₹18.00|
|2||Rail Vikas Nigam Ltd||5.4||₹32.3|
|4||GMR Infrastructure Ltd (GMRI)||-22.1||₹35.2|
Let’s discuss these best shares under ₹50 each one by one-
1. Bank of Maharashtra
The public sector bank in Maharashtra known as Bank of Maharashtra provides a range of financial services including personal banking, cash management, retail loans, and more. The pros of investing in this stock under ₹50 are that this stock has shown growth in terms of mutual fund investing, robust growth in annual EPS and its quarterly & yearly growth has also surged massively in the current financial year. Further, the stock has given a drawback of insufficient use of its capital to generate more profits leading to declined RoCE in the past 2 years consecutively.
2. Rail Vikas Nigam Ltd
As a project execution organization operating for and on behalf of the Ministry of Railways, Rail Vikas Nigam is a totally owned Government enterprise (MoR) whose share price is under ₹50. The company was established with the intent to design rail projects, mobilize financial resources, and construct rail projects related to improving port connections and the golden quadrilateral, as well as to raise extra-budgetary resources for project execution.
The advantage of investing in Rail Vikas Nigam Ltd. is affordable and the company’s net cash flow and cash flow from operating activities are increasing which has recently given 375.3% returns in the last 6 years. But the disadvantage is the growing cost of longer period projects.
3. NHPC Ltd.
A Mini-Ratna category-I enterprise of the Indian Government is NHPC Ltd. The business is one of the biggest in the nation for the development of hydropower and another best stock under ₹50. The organization is a hydroelectric power generating business committed to the design, creation, and execution of an efficient and interconnected network of hydroelectric projects in India. The pro of investing in NHPC is company’s net cash flow & cash from the operating activity are rising and the FII/FPI has also increased their shareholding. But the company is seeing a YoY fall in its net profit.
4. GMR Infrastructure Ltd (GMRI)
The infrastructure holding company, GMR Infrastructure Ltd, was established to finance the capital needs of numerous infrastructure projects across sectors. Through a number of special purpose companies, the corporation is involved in the construction of numerous infrastructure projects in the electricity and transportation sectors as well. The business engages in four business sectors—energy, airports, highways, and urban infrastructure—through subsidiaries.
This is yet another best share under ₹50 and has shown great results when it comes to its working capacity. The thing to notice with GMR Ltd. is its promoters have decreased their share in the company and the net profit is declining on a QoQ basis recently.
5. Trident Ltd.
The Trident Group’s flagship company, Trident Limited stock under ₹50, is a substantial producer of chemicals, captive power, yarn, bed linen, and paper made from wheat straw. Currently, the company has manufacturing facilities in Budhni, India, and Barnatan, Punjab. With Trident Ltd. as well, the mutual fund investing is increasing and it has seen an increase in its revenue over the past 3 quarters. Further, the stock’s average broker target price is ₹73, which suggests a potential upside of 46%. But the net profit and profit margins fell from one quarter to the next and the ROA has decreased as well over the 2 years.
Points to Note to achieve your Goals in Investing
- Trust your analysis, not everyone’s
Though the market experts are there to predict and suggest after analyzing the fundamentals of the shares and the company about investing in them. No matter how reliable the source is, never take a stock marketing suggestion at face value without doing your own in-depth study. Always choose your stocks after a thorough investigation and evaluation of the firm’s performance. While some advice may prove to be of great value to you, the incorrect advice may swiftly put you in danger.
- Do not invest in the loser stocks
As you know there are top losers of the day but they’re not the bad stocks, they did just not perform that day. The thing here is to eliminate the stocks which are not at all performing as they will not sink into the value of your portfolio. Though the value of these shares is below ₹50 they can be major contributors to your portfolio. There is no surety if the stock’s value will rise after the steep fall or not. So, sell the stock as soon as you’re realizing that your portfolio’s value is declining due to the non-performing stock.
- Decide your investment budget based on your goal
The only golden rule of the stock market is your investing budget which determines your goal. Just because you think that a particular ₹50 share will increase in the future and you’ll invest in it and go beyond your budget would be wrong. Based on how much you’ve decided to achieve from your investment should be your prime focus while investing in the stock market, whether it is a ₹50 share or a higher value share. Decide a particular amount and distribute it amongst the most performing stocks of your choice, to manage your goal and your investments.
The choice is to choose in the right way. NSE & BSE have a lot of stocks/shares which are below ₹50 but based on the specifics you should invest in them. As said earlier in the column as well invest in the ones which have a lower P/E ratio and which fundamentally depict to rise in future(maybe in a long run). The above-mentioned stocks are definitely the best buys under ₹50 based on the extensive market analysis but before going ahead and making potential profits, carry on your own research and then put in your hard-earn money in them.
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