The finances of the power sector of our country are managed by PFC (Power Finance Corporation). We will look into the various factors why PFC can be considered as a great share to purchase in the coming days.
Price to Earnings(P/E) Ratio:
Power Finance Corporation belongs to Finance industry where the average price-to-earnings ratio is 25.41. The P/E ratio of PFC is currently standing at 2.79 which is way below the industry average. This shows the company is undervalued and is potentially a good place to invest your money.
Price to Book(P/B) Value:
The average price to book value in the Finance Industry is 2.51x. P/B ratio of PFC is currently at 0.5x which means it is too much undervalued.
The company has been consistently in profit for the last few years. The profit and revenue have increased YoY.
Image Source: Tickertape
The company also pays good dividends and if you are someone who is a dividend-centric person then you should definitely look out for this. The only thing that you need to worry about the company is that debt in PFC has increased over the last years. And it is currently having around 6.6 trillion rupees in debt. Although it is performing well YoY, it needs to decrease its debt.
Although the fundamentals are strong, let’s see the technicals of the stock. The stock is currently moving above its 50 and 200 moving average. There is a strong resistance between levels Rs 130-Rs 140 which if broken, we will be able to see a good move. The resistance or the supply zone can be seen from the image given below.
The stock has continuously rebounded from 100-110 levels, also the moving averages are currently present around the same levels.
The all-time high of this stock is around Rs 192. Once it is broken in the coming time frame, we can see it multiply its value.
As per the financials, the stock is undervalued and can be a multibagger from the current levels in the coming years.
Levels to buy
Good levels to Buy: Rs 100- Rs 110 or below
Hold this stock for at least 2-3 years and you will see a good appreciation in value.
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