Synopsis:
Bharti Airtel, Hindustan Unilever, Avenue Supermarts, Asian Paints, and Trent. These companies have a proven track record of strong returns, solid business models, and market leadership in their sectors. With current P/E ratios below their 5-year median levels, they may offer value for patient investors.
Some fundamentally strong companies with solid financials and proven track records are now trading below their historical valuation multiples. This means investors can access quality businesses at prices lower than what the market has typically paid in the past. Such situations are rare, as strong fundamentals usually command a premium.
1. Bharti Airtel
Bharti Airtel Limited is a global telecom giant that operates across India, Africa, and South Asia. They offer a wide range of services, from 2G to 5G mobile connectivity, broadband, and digital TV.
Their offerings include voice and data services, enterprise solutions, managed services, data centers, and digital media. Plus, they provide mobile TV, video streaming, and gaming support.
The stock is currently trading at an attractive P/E multiple of 38.1x, much below its 5-Year Median P/E of 65.2x. It has delivered an ROE and ROCE of 23.18 percent and 13.48 percent respectively.
2. Hindustan Unilever
Hindustan Unilever Limited (HUL) is a leading fast-moving consumer goods (FMCG) company operating in India and globally. It manufactures and sells products across the Home Care, Beauty & Personal Care, and Foods & Refreshments segments.
HUL offers detergents, water purifiers, skin and hair care products, etc. Its food and beverage portfolio includes tea, coffee, soups, nutrition drinks, ice creams, and frozen desserts. The company also engages in exports, consignment, real estate, and trust-related businesses.
The stock is currently trading at an attractive P/E multiple of 54.8x, much below its 5-Year Median P/E of 61x. It has delivered an ROE and ROCE of 20.72 percent and 27.85 percent respectively.
3. Avenue Supermarts
Avenue Supermarts Limited is the powerhouse behind the D-Mart retail chain, where you can find everything from food and everyday essentials to clothing and home goods, all at prices that won’t break the bank. Founded by Radhakishan Damani, this company boasts over 400 stores scattered across India, all dedicated to the art of value retailing.
The stock is currently trading at an attractive P/E multiple of 104x, much below its 5-Year Median P/E of 121.8x. It has delivered an ROE and ROCE of 13.44 percent and 18 percent respectively.
4. Asian Paints
Asian Paints is one of only a few well-established and trusted decorative paint organisations in India, offering a reasonably wide range of paints, coatings, waterproofing, adhesives, and home décor.
It has continued to develop its service offerings into more full-service offerings, such as painting solutions, modular kitchens, and bath fittings. Asian Paints has created a solid brand presence in everybody’s home, along with contractors and tradespeople who are involved in home renovations and improvements.
The stock is currently trading at an attractive P/E multiple of 63.1x, much below its 5-Year Median P/E of 76x. It has delivered an ROE and ROCE of 20.59 percent and 25.72 percent respectively.
5. Trent
Trent Limited, part of the Tata Group, runs popular retail formats like Westside, Zudio, Star, and Landmark all over India. The company is all about fashion, lifestyle, and grocery, making sure to meet the varied needs of its customers. With a reputation for offering stylish yet affordable products, Trent has been on a fast track of growth, expanding through both its own stores and franchises.
The stock is currently trading at an attractive P/E multiple of 122x, much below its 5-Year Median P/E of 174.4x. It has delivered an ROE and ROCE of 30 percent and 30.71 percent respectively.
Written by Satyajeet Mukherjee
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