5 Debt Free Mid Cap Stocks That Are Trading At A Discount Of Upto 40% From ATHs: Should You Buy?

Dr. Lal Path Labs:

The company over the years of operations has stood as the leader in the diagnostic chain. The company trading over 40% lower than its all time high price fares good on a number of parameters including profitability growth, healthy ROE, ROC. Also, the company has been maintaining a good operating margin, And has a sound liquidity position with a current ratio at 4.32. Nevertheless, on the valuation side, it is trading at a high P/E and also has shown poor revenue growth over the years.

Nippon India:

The asset management company has a good AUM and hence good prospects of profitability. Also the company's PAT margin has recorded a surge. Further, better focus on B-30 cities in India as well as leveraging of the company's network for accumulating offshore mandates shall hold the key for its future growth, said Sharekhan in its recent report. Also, not to forget the company holds a key position in ETFs which shall also help the company in respect of valuations, noted the brokerage.

Pfizer:

The pharma company is into manufacturing of prescription drugs, consumer health products, over the counter formulations etc. Once again the concern with this stock is that it is trading at a premium valuation at this point. Nevertheless, it has a high ROCE, healthy liquidity together with high promoter holding. Also, the company's financials over the previous year are in line considering the latest Net profit of Rs. 143.91 crore for the December 2021 quarter.

Coforge:

Coforge similar to other IT stocks have had a weak start to the year 2022, losing a massive 23.5% Ytd. Nevertheless, in its quarterly result, the company raised its organic constant currency growth guidance for Fy22 to 24%. This was owing to strong deal pipeline as well as order inflows.

Meanwhile, Coforge's adjusted Ebitda margin for the quarter expanded by 90 basis points sequentially to 19.5%. Ebitda is short for earnings before interest tax depreciation and amortization. One basis point is one hundredeth of a percentage point. The management said, despite a wage hike, margins during the quarter were aided by strong growth across clients and better offshore mix. The management has guided for an adjusted Ebitda growth 44% y-o-y in FY22. "We believe there is further scope to improve margins in FY23 as well aided by levers of improving offshore mix, revenue growth leverage and pyramid optimization," said the Prabhudas Lilladher report.

L&T Technology:

Taking position in quality stocks is preached and likewise on some of the factors such as high promoter holding and debt free status the company fares good. Furthermore, also, the company has over the years maintained healthy ROE and ROCE over the 3 years period of 29% and 38.78%, respectively. Nonetheless as we cannot ignore the downsides, the company has a poor revenue growth record and also is trading at a high PE.
Nevertheless after its Q3 results, brokerages were divided on the scrip and gave it different rating from Outperform to Sell. "Digitisation is driving accelerated spends in R&D and company should benefit from it due to: (1) its strong capabilities, (2) multi-vertical presence, and (3) solid wallet share.We expect the company to deliver strong revenue growth over the coming years and retain it as our top pick in the Tier-II IT Services space", says Motilal Oswal.The target price has been Rs. 6130 per share.

Disclaimer:

The markets are posed to financial risk. Also the current times are highly volatile. So, please take your investment call accordingly.

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