HSIL Limited (NSE:HSIL), which is in the packaging business, and is based in India, received a lot of attention from a substantial price movement on the NSEI over the last few months, increasing to ₹309.9 at one point, and dropping to the lows of ₹193.2. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether HSIL’s current trading price of ₹199.2 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 HSIL’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
Check out our latest analysis for HSIL
Is HSIL still cheap?
The stock seems fairly valued at the moment according to my valuation model. It’s trading around 6.1% below my intrinsic value, which means if you buy HSIL today, you’d be paying a fair price for it. And if you believe the company’s true value is ₹212.14, then there’s not much of an upside to gain from mispricing. What’s more, HSIL’s share price may be more stable over time (relative to the market), as indicated by its low beta.
What does the future of HSIL look like?
Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company’s future expectations. With profit expected to more than double over the next couple of years, the future seems bright for HSIL. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.
What this means for you:
Are you a shareholder? It seems like the market has already priced in HSIL’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?
Are you a potential investor? If you’ve been keeping an eye on HSIL, now may not be the most optimal time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.