Four fundamentally strong small-cap stocks trading up to 60% below their 52-week highs
Subscribe to enjoy similar stories. After a strong rally from FY20 to FY24, Indian small-cap stocks have largely traded sideways over the past year. The consolidation comes on the back of stretched valuations, tighter liquidity, macro pressures such as higher interest rates and a weaker rupee, softer earnings trends, and an unusually heavy pipeline of new IPOs absorbing investor flows.
The small and mid-cap segment has undergone a full year of correction, making valuations far more reasonable. Against this backdrop, here’s a look at four fundamentally strong small-cap stocks that are currently down sharply from their 52-week highs. EMS is a multidisciplinary engineering, procurement, and construction (EPC) company, based in Delhi, specialising in comprehensive water and wastewater management solutions.
Established in 1998, the company offers turnkey services encompassing the collection, treatment, and disposal of water and wastewater. EMS plays a crucial role in water and wastewater management in India, offering comprehensive solutions for sewage treatment, water supply, and effluent management. The company specialises in designing, constructing, operating, and maintaining water treatment plants (WTPs) and sewage treatment plants (STPs), contributing significantly to urban sanitation and clean water initiatives.
Over the past three years, its revenue has grown at a CAGR of around 39%, while profit has expanded at a strong CAGR of about 32.6%. Its three-year average ROE & ROCE stand at 20% and 25.8%, respectively. The company operates with a low debt-to-equity ratio of 0.1.
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