6 Indian stocks that fit in Peter Lynch’s approach to investing

One of the most successful and well-known investors of all time, Peter Lynch, is best known for growth at a reasonable price approach to investing. A highly successful former manager of the Fidelity Magellan Fund, his philosophy is detailed in his best-selling book "One Up on Wall Street" and more recently in "Beating the Street." Lynch is often associated with the PEG ratio, which measures PE ratios in relation to growth rates. Based on the idea of Lynch, a custom screen made by MarketSmith emphasizes securities that are trading for below-average prices on a PE or PEG basis that are not already widely owned by institutions.

With an operating revenue of Rs 8,155.78 crore on a trailing 12-month basis, Surya Roshni has reported outstanding annual revenue growth of 39%, pre-tax margin of 4% and ROE of 13%. The company has a reasonable debt to equity of 4%, which signals a healthy balance sheet. The stock from a technical standpoint is comfortably placed above its key moving averages, around 10% and 20% from 50DMA and 200DMA.

Chaman Lal Setia Exports has an operating revenue of Rs 1,204.81 crore on a trailing 12-month basis. The company has reported good annual revenue growth of 10%, pre-tax margin of 9% and ROE of 15%. The company has a reasonable debt to equity of 14%, which signals a healthy balance sheet. The stock from a technical standpoint is trading close to its 50DMA and comfortably placed above its 200DMA, around 7% above 200DMA.

With an operating revenue of Rs 2,183.28 crore on a trailing 12-month basis, Panama Petrochem has reported outstanding annual revenue growth of 47%, pre-tax margin of 13% and ROE of 29%. The company is debt free and has a strong balance sheet enabling it to report stable earnings growth across business cycles. The stock from a technical standpoint is comfortably placed above its key moving averages, around 11% and 22% from 50DMA and 200DMA. It has recently broken out of a base in its weekly chart and is trading around 1% from the pivot point.

With an operating revenue of Rs 2,168.69 crore on a trailing 12-month basis, G M Breweries has reported outstanding annual revenue growth of 31%, pre-tax margin of 26% and ROE of 15%. The company is debt free and has a strong balance sheet enabling it to report stable earnings growth across business cycles. The stock from a technical standpoint is trading close to its key moving averages, around 2% and 1% from 50DMA and 200DMA. It is currently forming a base in its weekly chart and is trading around 6% away from the crucial pivot point.

With an operating revenue of Rs 6,086.71 crore on a trailing 12-month basis, Jindal Poly Films has reported outstanding annual revenue growth of 46%, pre-tax margin of 28% and ROE of 31%. The company has a reasonable debt to equity of 18%, which signals a healthy balance sheet. The stock from a technical standpoint is trading below to its key moving averages. It needs to take out these levels and stay above it to make any meaningful move.

Ambika Cotton Mills has an operating revenue of Rs 985.33 crore on a trailing 12-month basis. The company has outstanding annual revenue growth of 46%, pre-tax margin of 27% and ROE of 24%. The company is debt free and has a strong balance sheet enabling it to report stable earnings growth across business cycles. The stock from a technical standpoint is trading below to its key moving averages. It needs to take out these levels and stay above it to make any meaningful move.

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