Grow Your Portfolio on a Budget: Top Stock Picks Under Rs. 500
Investing in the Indian stock market is a treasure trove of opportunity but with its unlimited potential and so many choices, it can be overwhelming for investors to navigate through the market. while some may find higher share prices intimidating they can earn long-term rewards and substantial growth.
This guide will enlighten you about investing in the “sub-Rs.500” category, Arihantplus’s award-winning analysts have curated a list of fundamentally strong companies in this value-driven range, offering investors intriguing potential.
Overview of potential Sub-Rs. 500 Stocks for Your Portfolio
📈Bharat Agri Fert & Realty Ltd
- About the company
Bharat Agri, Fert & Realty Ltd is utilizing the land bank of 120 acres that the company has, and another 30 acres of land in the name of the Promoter which could also be transferred in the company’s books at an appropriate time in the future.
The company intends to make the best use of these land assets for a variety of initiatives, including commercial property renovation and real estate investments.
- Recent News
Bharat Agri recently announced plans to form a joint venture with the prestigious Shapoorji Pallonji Group to redevelop the landmark Bharat House in the Fort Area. This collaboration hopes to extract enormous value from the property, with a projected cash flow of INR 2,000 million.
- Analysis
Looking ahead, the company’s management has devised a strategy to generate large cash flows from ongoing and upcoming projects. According to information shared at earnings conferences, Bharat Agri is expected to create a minimum cash flow of INR 20,000-25,000 million over the next 4-5 years.
📈Orient Bell Ltd
- About the Company
Orient Bell Ltd is a key player in the building materials business, helping to revive it. The company has achieved amazing success in real estate pre-sales and has effectively managed inventory levels to ensure seamless operations.
- Recent News
Orient Bell completed its capital expenditure cycle and plans to create free cash flows in the coming quarters. Furthermore, the company is trying to improve its operational scale and utilization rates, which should result in higher contribution margins.
- Analysis
The corporation anticipates reaching peak capacity utilization in the near future, with rates of 85-90%. With no substantial capital expenditures anticipated beyond maintenance and potential improvements, Orient Bell is primed for great financial performance. We retain our BUY recommendation and set a target price of INR 579 based on a favorable value of 25x FY26 Estimated Earnings Per Share (EPS). We believe that the company’s present performance is at an inflection point and that it will continue to provide great results from here.
📈Chemplast Sanmar Ltd
- About the company
Chemplast Sanmar Ltd specializes in the production of Specialty Chemicals and is rapidly expanding its capacity in this area. The company intends to capitalize on rising demand for its products, notably in the Custom Manufacturing and Specialty Paste PVC Resin markets.
- Recent news
Recent updates highlight the company’s aggressive growth ambitions, which include raising revenue from INR 3.25 billion in FY23 to INR 9.6 billion in FY26E via strategic investments in production capacity.
- Analysis
We initiate coverage with a “BUY” rating and forecast a target price of INR 718 per share. This valuation is based on a Sum-of-the-Parts (SOTP) study, taking into account the company’s expansion goals and the potential for 135% growth in Specialty Paste PVC resin sales by FY26.
📈Chambal Fertilisers and Chemicals Ltd
- About the Company
Chambal Fertilisers and Chemicals Ltd is a well-known fertilizer and chemical manufacturer with a track record of efficient operations and strong financial performance. The company has three units in Gadepan and is preparing for the forthcoming Kharif season.
- Recent news
Recent reports show that the company’s EBITDA margins have recovered to long-term levels, indicating a good trend. Chambal is prepared to fulfill market demands for Kharif crops, which are expected to rise.
- Analysis
We value Chambal at 6.5x EV/EBITDA for FY26. Estimated EBITDA is Rs 3,023 crore, with a target price of INR 439 per share. The company’s great track record of profitability, healthy balance sheet, and net cash surplus position them well for future growth opportunities.
📈Zuari Industries Ltd
- About the Company
Zuari Industries Ltd is a corporation that operates in the specialty fertilizer and sugar industries. The company owns a huge land bank in South Goa and is exploring debt reduction opportunities through land monetization.
- Recent news
Recent developments show that Zuari’s Specialty Fertilizer business will remain stable, despite regulatory changes affecting the sugar industry. The company’s strategic focus on asset monetization and efficient operations is intended to create value for shareholders.
- Analysis
Zuari Industries Ltd has a fair value of INR 671 per share, according to our study, after accounting for a 50% Holding Company discount on its assets and valuing its land bank at INR 10 million per acre. With liquid assets in listed associates and a focused approach to debt reduction, Zurari presents an attractive investment opportunity.
Factors to consider before investing
- Investment Horizon: If we are looking for short-term gains, we may choose to target more volatile companies; but, if we are looking for long-term gains, we might choose less volatile firms with excellent fundamentals.
- Diversification: Do not put all your eggs in one basket! Diversify your portfolio by investing in numerous stocks rather than putting all of your money in just one stock.
Additional Tips for Investing in Stocks Below Rs. 500
- Stay informed: To stay ahead of the curve, keep up with market news and corporate updates on a regular basis.
- Invest gradually. Consider rupee-cost averaging, which involves investing a fixed amount at regular intervals to average out the cost per share over time.
- Be patient: accumulating riches takes time. Don’t expect quick returns; instead, focus on creating long-term value.
🧠Concluding Thoughts
Investing in these sub-Rs. 500 companies is a wonderful way for savvy investors to diversify their portfolios while attaining considerable gain. Arihantplus is committed to providing investors with comprehensive analysis and strategic assistance. Follow our blog and sign up for our newsletter to receive more professional views and market updates. Let Arihantplus be a reliable partner on the path to financial success.
Disclaimer: Investment in the securities market is subject to market risk, read all related documents carefully before investing. Reg. office: Arihant Capital Markets Limited, 6 Lad Colony, Y.N. Road, Indore – 452003, SEBI Registration number for NSE, BSE, MCX & NCDEX:- INZ000180939, NSDL – IN-DP-127-2015 DP ID-IN301983; CDSL DP ID- 43000
