EV stocks with a price-to-earnings ratio lower than the industry to add to your watchlist

The price-to-earnings ratio or price-to-earnings ratio compares the current stock price to a company’s earnings per share (EPS), a commonly used measure for determining a stock’s value.

A company with a lower price-to-earnings ratio outperforms its competitors with a higher price-to-earnings ratio, meaning investors pay less money for every dollar of profit generated by a company. This method helps investors make informed decisions before investing in a company.

Below are the three electric vehicle (EV) stocks currently trading at a lower price-to-earnings ratio than the industry average.

Amara Raja Energy & Mobility Limited

With a market capitalization of Rs. At Rs 20,615 crore, the share price of this mid-cap EV stock rose 1.8 percent on BSE to touch an intraday high of Rs. 1,134 during Friday’s trading session, compared to the previous closing price of Rs. 1,134.

The stock has a price-to-earnings ratio of 24.6, compared to the industry’s price-to-earnings ratio of 34, which indicates that the stock is trading at a lower price, or in other words, the stock is undervalued.

In terms of financials, the company’s operating revenue increased by almost 9.25 percent from Rs. 2,637 crore in Q3 FY22-23 to Rs. 2,881 crore in Q3 FY23-24, accompanied by a 7.6 percent increase in net profit, from Rs. 223 crore in Q3 FY22-23 to Rs. 240 crore in Q3 FY23-24.

In the last six months, the stock has delivered a positive return of around 81.4 percent and almost 90.02 percent in the last year. So far in 2024, this has delivered a positive return of approximately 36.5 percent.

As of March 2024, FIIs own 24.46 percent of the shares, while DIIs own 15.36 percent of the shares in the company, which amounts to 39.82 percent of the institutional holdings.

Amara Raja Energy & Mobility Limited, a flagship company of the Amara Raja Group, is the technology leader and one of the largest manufacturers of lead-acid batteries for both industrial and automotive applications in the Indian battery industry.

The company offers Li-ion cells, battery packs and charging solutions for light EVs and the telecom industry, and is one of the first companies in India to invest in Li-ion technologies with a state-of-the-art Gigafactory in the works.

Mahindra & Mahindra Limited

With a market capitalization of Rs. 2.72 lakh crore, the company’s share price rose 1.2 percent on the BSE to touch an intraday high of Rs. 2,210 during Friday’s trading session.

Mahindra & Mahindra’s price-to-earnings ratio is 24.1, which is lower than the industry’s price-to-earnings ratio of 52.8. This indicates that the stock is trading at a lower price or, in other words, that the stock is undervalued.

On a year-on-year basis, the company’s operating revenue grew by nearly 15.3 percent from Rs. 30,621 crore in Q3 FY22-23 to Rs. 35,299 crore in Q3 FY23-24, accompanied by a 0.56 percent increase in net profit, from Rs. 2,994 crore in Q3 FY22-23 to Rs. 2,977 crore in Q3 FY23-24.

In the last six months, the stock has delivered a positive return of around 49.06 percent and almost 77.2 percent in the last year. So far in 2024, it has delivered a positive return of about 28.5 percent.

As of March 2024, FIIs own 41.75 percent of the shares, while DIIs own 26.13 percent of the shares in the company, representing 67.88 percent of institutional holdings.

Mahindra & Mahindra Limited, formerly known as Mahindra & Mohammed, is an Indian automobile manufacturing company and part of the Mahindra Group. The company operates globally and produces SUVs, MPVs, pick-ups, light commercial vehicles and HCVs, electric vehicles, buses, trucks and two-wheelers.

Ashok Leyland Limited

With a market capitalization of Rs. 59,387.2 crore, the share price of the stock rose nearly 1.9 percent on BSE and touched an intraday high of Rs. 205.1 during Friday’s trading session, compared to the previous closing price of Rs. 201.35.

Ashok Leyland’s price-to-earnings ratio is 24, which is less than the industry’s price-to-earnings ratio of 32.3.

In terms of financials, the company’s operating revenue increased by almost 6.6 percent from Rs. 10,400 crore in Q3 FY22-23 to Rs. 11,093 crore in Q3 FY23-24, accompanied by a 75.5 percent increase in net profit, from Rs. 351 crore in Q3 FY22-23 to Rs. 609 crore in Q3 FY23-24.

As of March 2024, FIIs own 21.45 percent of the shares, while DIIs hold 12.23 percent of the shares in the company, representing 33.68 percent of institutional holdings.

Over the past six months, the stock has delivered a positive return of around 20.2 percent and nearly 40.7 percent over the past year. So far in 2024, this has delivered a positive return of approximately 8.8 percent.

Established in 1948, Ashok Leyland Limited is the flagship company of the Hinduja Group and is India’s second largest commercial vehicle manufacturer and the world’s fourth largest bus manufacturer.

Optare Group, a UK subsidiary of the company renamed Switch Mobility Limited in 2020, is an electric vehicle company.

As part of Ashok Leyland’s plan, Switch Mobility will be positioned as its global arm focused on green mobility and electric vehicles, with a focus on creating new EV platforms and growing the EV industry.

Written by Shivani Singh

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