PEG Ratio Screen: NSE Stocks Trading Under 1

The PEG ratio screen lit up before the opening bell. At a brokerage office in Lower Parel, a trader ran FairStock's valuation filter and stopped at [Chennai Petroleum](/stock/CHENNPETRO) (NSE: CHENNPETRO) at 0.31. [Tata Steel](/stock/TATASTEEL) (NSE: TATASTEEL) came in at 0.42, and [Waaree Energies](/stock/WAAREEENER) (NSE: WAAREEENER) was right behind at 0.38. That list sat next to a simpler read: profit growth across these companies is running far ahead of what their share prices currently imply. The PEG ratio divides a forward price-to-earnings multiple by expected earnings growth. A reading under 1 says the market has not fully priced the growth. FairStock's latest screen sorted NSE companies with forward PEG ratios below 0.6 and FairStock Scores above 65. The screen did not produce one clean theme. It produced refiners and steelmakers. It also surfaced solar manufacturers, a paints company, an NBFC and a hospitality name. This is not a uniform growth story. It's a valuation friction story. [Chennai Petroleum](/stock/CHENNPETRO) has the lowest PEG on the list. The refiner was founded as Madras Refineries in 1965, and its earnings still move with crude spreads. FairStock puts its forward P/E at 8.6 with projected EPS growth near 102%. That produces a PEG of roughly 0.31. The cheap multiple makes sense if you believe refining margins stay high. They won't always. But even a margin contraction to mid-cycle levels leaves room if earnings stay anywhere near current run rates. [Tata Steel](/stock/TATASTEEL), a company that has been smelting steel since 1907, shows a forward P/E of 11.4 and expected EPS growth around 71%. That gives a PEG near 0.42. India's construction and auto demand support volumes, while coking coal costs have cooled. The risk is Chinese steel exports. They can compress domestic pricing quickly. Still, the screen says the stock embeds a much lower growth path than the company's recent earnings imply. [Waaree Energies](/stock/WAAREEENER) is the ...