Veto Switchgears and Cables Limited (NSE:VETO), a electrical company based in India, saw significant share price volatility over the past couple of months on the NSEI, rising to the highs of ₹238.35 and falling to the lows of ₹177.05. This high level of volatility gives investors the opportunity to enter into the stock, and potentially buy at an artificially low price. A question to answer is whether Veto Switchgears and Cables’s current trading price of ₹186.75 reflective of the actual value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Veto Switchgears and Cables’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change. See our latest analysis for Veto Switchgears and Cables

What’s the opportunity in Veto Switchgears and Cables?

Great news for investors – Veto Switchgears and Cables is still trading at a fairly cheap price. In this instance, I’ve used the price-to-equity (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. I find that Veto Switchgears and Cables’s ratio of 11.81x is below its peer average of 20.11x, which suggests the stock is undervalued compared to the Electrical industry. What’s more interesting is that, Veto Switchgears and Cables’s share price is quite stable, which could mean two things: firstly, it may take the share price a while to move to its intrinsic value, and secondly, there may be less chances to buy low in the future once it reaches that value. This is because the stock is less volatile than the wider market given its low beta.

What kind of growth will Veto Switchgears and Cables generate?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. With profit expected to grow by 33.29% over the next couple of years, the future seems bright for Veto Switchgears and Cables. It looks like higher cash flows is on the cards for the stock, which should feed into a higher share valuation.

What this means for you:

Are you a shareholder? Since VETO is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. With an optimistic outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as financial health to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on VETO for a while, now might be the time to enter the stock. Its prosperous future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy VETO. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed investment decision.

Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Veto Switchgears and Cables. You can find everything you need to know about Veto Switchgears and Cables in the latest infographic research report. If you are no longer interested in Veto Switchgears and Cables, you can use our free platform to see my list of over 50 other stocks with a high growth potential.

To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned.