3 Smallcap Stocks with PEG Ratio Below 1 Trading at a Discount – Add These to Your Watchlist
3 Smallcap Stocks : Investors looking for undervalued opportunities often turn to the PEG ratio (Price/Earnings-to-Growth ratio) as a key valuation metric. A PEG ratio below 1 suggests that a stock is potentially undervalued relative to its growth prospects.
In this article, we highlight three smallcap stocks that not only have a PEG ratio of less than 1 but are also trading at a discount of up to 55% from their 52-week highs. These stocks present an attractive watchlist for investors seeking long-term growth potential.
Understanding the PEG Ratio
The PEG ratio is a valuable tool for investors as it considers both the price-to-earnings (P/E) ratio and the expected earnings growth rate of a company.
Formula for PEG Ratio:
PEG Ratio = P/E Ratio / Expected Earnings Growth Rate
A PEG ratio below 1 typically suggests that a stock is trading at an attractive valuation relative to its earnings growth, making it an interesting pick for value and growth investors alike.
Now, let’s dive into three high-growth smallcap stocks with a PEG ratio of less than 1 that are currently trading at a significant discount.
1. Action Construction Equipment (ACE) – A Leader in Construction Machinery
- PEG Ratio: 0.91
- Current Market Price (CMP): ₹1,227
- 52-Week High: ₹1,695
- Discount from 52-Week High: 27.61%
Company Overview
Action Construction Equipment Ltd. (ACE), established in 1995, is a leading Indian manufacturer of construction and material handling equipment. Headquartered in Palwal, Haryana, ACE specializes in a wide range of mobile cranes, tower cranes, backhoe loaders, forklifts, tractors, and harvesters.
The company plays a crucial role in infrastructure development by supplying machinery to construction, power plants, mining, steel, cement, and defense sectors. Its equipment is widely used in large-scale projects such as metro rail, dams, ports, and roads.
Financial Highlights
| Metric | Q3FY24 | Q3FY25 | YoY Growth |
|---|---|---|---|
| Revenue | ₹776.08 Cr | ₹905.28 Cr | +16.64% |
| Net Profit | ₹88.24 Cr | ₹111.68 Cr | +26.56% |
Why Watch This Stock?
With strong revenue growth and rising profitability, ACE is well-positioned to benefit from India’s booming infrastructure sector. The stock is trading nearly 28% below its 52-week high, making it an attractive candidate for long-term investors.
2. Angel One – A Leading Stock Brokerage Firm
- PEG Ratio: 0.88
- Current Market Price (CMP): ₹2,389
- 52-Week High: ₹3,503
- Discount from 52-Week High: 31.80%
Company Overview
Angel One, formerly known as Angel Broking, is a top-tier stock brokerage firm in India. Founded in 1996, the company has evolved into a tech-driven investment platform offering:
✅ Online trading
✅ Investment advisory
✅ Margin trading
✅ Algorithmic trading
✅ Smart order placements
Angel One provides access to stocks, mutual funds, ETFs, US stocks, currencies, commodities, futures, options, bonds, loans, and fixed deposits.
Financial Highlights
| Metric | Q3FY24 | Q3FY25 | YoY Growth |
|---|---|---|---|
| Revenue | ₹1,060.80 Cr | ₹1,263.80 Cr | +19.13% |
| Net Profit | ₹260.30 Cr | ₹281.47 Cr | +8.13% |
Why Watch This Stock?
Despite robust revenue growth, Angel One’s stock is down nearly 32% from its peak. The company is well-positioned to capitalize on India’s growing retail participation in the stock market, making it an interesting pick for investors looking for long-term gains.
3. Jupiter Wagons – A Key Player in Railway Manufacturing
- PEG Ratio: 0.88
- Current Market Price (CMP): ₹318
- 52-Week High: ₹748
- Discount from 52-Week High: 57.48%
Company Overview
Jupiter Wagons Limited (JWL), founded in 1979, is a leading manufacturer of railway freight wagons, passenger coaches, and related components. Headquartered in Kolkata, West Bengal, the company specializes in open, covered, flat, hopper, and container wagons, along with key accessories such as:
✅ Alloy steel cast bogies
✅ High tensile center buffer couplers
✅ Draft gears
Financial Highlights
| Metric | Q3FY24 | Q3FY25 | YoY Growth |
|---|---|---|---|
| Revenue | ₹900.81 Cr | ₹1,044.65 Cr | +15.96% |
| Net Profit | ₹81.46 Cr | ₹96.43 Cr | +18.37% |
Why Watch This Stock?
Jupiter Wagons has solid financial growth and operates in a high-demand industry. However, the stock has experienced a steep decline, currently trading at a 57.48% discount from its 52-week high. With the government’s push for railway infrastructure development, this stock could be a potential turnaround story.
Final Thoughts
These three smallcap stocks—Action Construction Equipment, Angel One, and Jupiter Wagons—have strong growth potential and are trading at significant discounts.
A PEG ratio below 1 indicates undervaluation, making them attractive investment opportunities for those willing to ride out market volatility. However, investors should conduct further research and consider market risks before making investment decisions.
Summary Table
| Stock | CMP (₹) | 52-Week High (₹) | Discount (%) | PEG Ratio |
|---|---|---|---|---|
| Action Construction Equipment | 1,227 | 1,695 | 27.61% | 0.91 |
| Angel One | 2,389 | 3,503 | 31.80% | 0.88 |
| Jupiter Wagons | 318 | 748 | 57.48% | 0.88 |
Which of these stocks will you be adding to your watchlist? Let us know in the comments! 🚀
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Disclaimer: This blog post is for informational purposes only and should not be considered financial advice. Investors should conduct thorough research and consult with a qualified financial advisor before making any investment decisions.