PEG Screen: Profit Growth Outpaces P/E in 8 Stocks

A PEG ratio below 0.14 looks like a clearance sale on growth. Eight Indian stocks passed that screen this week. The idea is simple: profit growth is outpacing the P/E multiple. [Chennai Petroleum (NSE: CHENNPETRO)](/stock/CHENNPETRO) leads with a PEG of 0.01 and 999% profit growth. [Waaree Energies (NSE: WAAREEENER)](/stock/WAAREEENER) brings up the rear at 0.14 with 14.2% profit growth. Those numbers demand a second look. But a PEG screen is not a buy list. It's a starting point. The market prices expectations, not reported history. When a stock trades at a PEG of 0.01, the market is effectively saying: "I don't trust that 999% number." You shouldn't trust it blindly either. What the PEG Screen Actually Says The PEG ratio divides the P/E multiple by earnings growth. A PEG below 1 is generally considered cheap. Below 0.15 is extreme. This screen throws up names across sectors: [Chennai Petroleum (NSE: CHENNPETRO)](/stock/CHENNPETRO), [Acme Solar (NSE: ACMESOLAR)](/stock/ACMESOLAR), [Ventive Hospitality (NSE: VENTIVE)](/stock/VENTIVE), [Akzo Nobel India (NSE: AKZOINDIA)](/stock/AKZOINDIA), [Piramal Finance (NSE: PIRAMALFIN)](/stock/PIRAMALFIN), [Tata Steel (NSE: TATASTEEL)](/stock/TATASTEEL), [Waaree Energies (NSE: WAAREEENER)](/stock/WAAREEENER), and BSE-listed 511628. That's a refinery, two solar developers, a chemical company, a financier, a steelmaker, and a solar panel maker. No single sector story. That dispersion is both interesting and suspicious. When a screen pulls from cyclicals alongside one-time profit spikes, the common factor may not be undervaluation. It may be that trailing profit growth is unreliable. Look at [Chennai Petroleum (NSE: CHENNPETRO)](/stock/CHENNPETRO). The 999% profit growth likely comes from a low base or inventory gains, not from a durable change in refining margins. Chennai Petroleum's earnings swing hard with crude prices and product cracks. A triple-digit growth rate compresses the P/E ratio into something almost meaningless....