Agarwal Industrial Corporation Limited (NSE:AGARIND) is a company with exceptional fundamental characteristics. Upon building up an investment case for a stock, we should look at various aspects. In the case of AGARIND, it is a financially-sound company with a great track record of performance, trading at a great value. In the following section, I expand a bit more on these key aspects. If you're interested in understanding beyond my broad commentary, take a look at the report on Agarwal Industrial here.

Undervalued with solid track record

In the previous year, AGARIND has ramped up its bottom line by 80%, with its latest earnings level surpassing its average level over the last five years. Not only did AGARIND outperformed its past performance, its growth also surpassed the Chemicals industry expansion, which generated a 10% earnings growth. This is an optimistic signal for the future. AGARIND's ability to maintain an adequate level of cash to meet upcoming liabilities is a good sign for its financial health. This suggests prudent control over cash and cost by management, which is an important determinant of the company’s health. AGARIND's has produced operating cash levels of 0.38x total debt over the past year, which implies that AGARIND's management has put its borrowings into good use by generating enough cash to cover a sufficient portion of borrowings.

AGARIND is currently trading below its true value, which means the market is undervaluing the company's expected cash flow going forward. According to my intrinsic value of the stock, which is driven by analyst consensus forecast of AGARIND's earnings, investors now have the opportunity to buy into the stock to reap capital gains. Compared to the rest of the materials industry, AGARIND is also trading below its peers, relative to earnings generated. This bolsters the proposition that AGARIND's price is currently discounted.

Next Steps:

For Agarwal Industrial, I've put together three relevant factors you should further research:

1. Future Outlook: What are well-informed industry analysts predicting for AGARIND’s future growth? Take a look at our free research report of analyst consensus for AGARIND’s outlook.

2. Dividend Income vs Capital Gains: Does AGARIND return gains to shareholders through reinvesting in itself and growing earnings, or redistribute a decent portion of earnings as dividends? Our historical dividend yield visualization quickly tells you what your can expect from AGARIND as an investment.

3. Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of AGARIND? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.