PTC India (NSE: PTC), which serves clients with power trading solutions, cross-border power trading, and consultancy services, has provided a one-year negative return of 20.74%, compared to the 28.39% negative return provided by its peer Indian Energy Exchange, among others. The company is trading near its 52-week low. As a result, based on its strong fundamentals, investors can consider the stock for long-term gains.
Factors to Consider
Constant volatility in the market due to global hues resulted in a slowdown in various sectors such as infrastructure, automotive, and other industries. Therefore, like other small-cap companies, PTC India stock is also not unscathed.
The company seems to have experienced a downtrend in price on investors’ concerns and its low-profit margin. But PTC India has recorded consistent strong numbers over the past few years.
Consistent sales, prudent expense management, and steady profits have supported the financials. Additionally, consistent double-digit return on capital employed (ROCE) and return on equity (ROE), along with no long-term debt, indicates financial stability. The company’s net cash flow has also remained strong over the past few years.
From the perspective of income-oriented investors, the company seems attractive as it offers consistent dividends, with a strong cash position. With an annual dividend yield of 9.59%, the company’s efforts to return the value to shareholders are visible.
Though the company experienced a top-line contraction in 2021-2022 for the first time in the last three years, its leadership position in the Indian power trading market in the terms of overall trading volumes and technology advancement remains key to success.
Our View
In the current era of digitization, the company reflects strong business momentum with technological advancement, operational efficiency, and financial stability. Therefore, long-term investors buying the dips might consider the stock as an attractive investment opportunity. Also, the company’s TTM P/E ratio stands at 5.45, compared to the sector average of 13.67 which indicates that the stock is undervalued at the current level.