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Undervalued Stocks
An undervalued stock is a stock that is trading at a price lower than its actual worth. This actual worth is called intrinsic value. It is based on how much profit the company is expected to make in the future. Other things like cash flow, debt levels, and return on assets also help in finding the intrinsic value.
When the market price is lower than this value, the stock is considered undervalued. These value stocks are often overlooked or mispriced by the market, presenting potential investment opportunities for value investors.
Top Undervalued Stocks in India
| Name | Price | Analyst Rating | M Cap | Target Price | Alpha | 1Y Return | 3Y Return | 5Y Return | PE | Industry PE | PB | Beta | Div Yld | Net Profit Qtr | Net Profit QoQ % | Net Profit YoY % | Net Profit 3Y Change % | Rev Qtr (in Cr) | Rev QoQ (in %) | Rev 1Y change % | Rev 3Y change % | Profit Mar Qtr | Profit Mar QoQ | Profit Mar 1Y Change% | Profit Mar 3Y Change% | Sector | M Cap | ROE | ROCE | EPS | Volume |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
₹304.10 | HOLD | LARGE CAP | 355 | 50.58% | 11.04 | 20.85 | 7.55 | 0.52 | 3.5% | 5018.45 Cr | 68.92% | 126.1% | 19918.24 | 3.24% | 10.88% | 24.16% | 46.54% | 52.34% | 82.11% | Consumer Defensive | 387153.19 | 27.91% | 36.71% | 28.01 | 23319679 | ||||||
₹2,221.20 | HOLD | LARGE CAP | 2730 | 55.63 | 50.03 | 11.81 | 0.68 | 1.06% | 1073.92 Cr | 5.47% | 20.26% | 8849.72 | 3.95% | 16.51% | 10.94% | 1.46% | 3.22% | Basic Materials | 214092.95 | 19.24% | 25.04% | 38.68 | 1384055 | ||||||||
₹1,825.30 | BUY | LARGE CAP | 1976.5 | 4.22% | 8.89% | 91.37% | 197.57% | 40.13 | 42.52 | 17.11 | 0.63 | 0.92% | 3401.09 Cr | 8.42% | 13.8% | 222.39% | 15469.07 | 7.39% | 8.42% | 36.02% | 20.88% | 0.96% | 4.97% | 137.02% | Basic Materials | 438094.57 | 17.83% | 16.29% | 45.76 | 2606057 | |
₹3,953.60 | HOLD | LARGE CAP | 4075 | 2.54% | 7.36% | 17.69% | 26.06% | 89.59 | 11.94 | 0.67 | NA | 855.78 Cr | 24.96% | 6.78% | 81.42% | 18100.88 | 8.54% | 16.87% | 91.62% | 4.56% | 15.12% | Consumer Defensive | 256701.18 | 14.1% | 18.47% | 41.61 | 352801 | ||||
₹470.10 | HOLD | LARGE CAP | 436 | 11.78% | 17.35% | 102.33% | 196.84% | 9.22 | 17.96 | 13.59 | 0.88 | 6.65% | 7165.98 Cr | 68.11% | 103.14% | 30818.17 | 14.53% | 30.67% | 24.62% | 46.79% | 55.45% | Basic Materials | 275319.89 | 96.15% | 70.32% | 57.28 | 27328045 | ||||
₹411.05 | BUY | LARGE CAP | 558 | 64.28% | 397% | 48.08 | 55.81 | 13.04 | 0.94 | 0.16% | 260 Cr | 25.33% | 253.1% | 4204.42 | 24.72% | 126.76% | 13.17% | 0.5% | 55.71% | Consumer Defensive | 145852.82 | 15.16% | 19.35% | 7.79 | 12325188 | ||||||
₹6,975.50 | BUY | LARGE CAP | 8050 | 39.41% | 44.57% | 139.12% | 175.01% | 37.13 | 37.96 | 7.93 | 1.01 | 1.31% | 1420.61 Cr | 3.74% | 18.33% | 182.38% | 5999.83 | 14.12% | 83.25% | 25.09% | 4.97% | 3.69% | 54.1% | Consumer Cyclical | 198973.8 | 25.03% | 30.32% | 172.66 | 1259945 | ||
₹453.55 | BUY | LARGE CAP | 508 | 57.74% | 64.04% | 391.72% | 872.79% | 55.65 | 56.4 | 11.18 | 0.94 | 0.8% | 1570.19 Cr | 22.82% | 34.09% | 124.56% | 7153.85 | 23.51% | 17.27% | 54.66% | 22.24% | 14.34% | 45.19% | Consumer Cyclical | 331937.06 | 29.56% | 37.49% | 7.23 | 14089623 | ||
₹6,409.00 | HOLD | LARGE CAP | 5872.5 | 16.35% | 22.19% | 91.79% | 326.89% | 79.76 | 66.21 | 20.71 | 1.02 | NA | 432.85 Cr | 5.82% | 3495.79 | 6.41% | 2.13% | 1.85% | Industrials | 133078.46 | 28.75% | 38.43% | 5.52560526008916 | 596298 | |||||||
₹1,319.00 | HOLD | LARGE CAP | 1297.5 | 12.62% | 19.94% | 51.65% | 49.72% | 19.82 | 42.52 | 3.31 | 0.82 | 0.7% | 1189.6 Cr | 2.64% | 162.32% | 8727 | 16.54% | 51.51% | 17.54% | 73.14% | Basic Materials | 110631.93 | 20.15% | 25.47% | 68.65 | 1969692 |
| Name | Price | Analyst Rating | M Cap | Target Price | Alpha | 1Y Return | 3Y Return | 5Y Return | PE | Industry PE | PB | Beta | Net Profit Qtr | Net Profit QoQ % | Net Profit YoY % | Net Profit 3Y Change % | Rev Qtr (in Cr) | Rev QoQ (in %) | Rev 1Y change % | Rev 3Y change % | Profit Mar Qtr | Profit Mar QoQ | Profit Mar 1Y Change% | Profit Mar 3Y Change% | Sector | M Cap | ROE | ROCE | EPS | Volume |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
₹149.11 | BUY | LARGE CAP | 180.5 | 30% | 35.5% | 222.76% | 818.93% | 23.66 | 28.12 | 4.74 | 1.23 | 2488.09 Cr | 159.58% | 12451.44 | 11.62% | 102.82% | 22.68% | 27.99% | Utilities | 267767.99 | 26.75% | 21.83% | 6.612 | 81276272 | ||||||
₹324.55 | HOLD | LARGE CAP | 378 | 5.61% | 604.24 | 37.96 | 7.42 | 1.4 | -3483 Cr | 69605 | 1.31% | 57.91% | 6.4% | Consumer Cyclical | 123488.53 | 17.15% | 18.21% | 46.3048163304841 | 9707654 | |||||||||||
₹176.15 | BUY | SMALL CAP | 300 | 24.64 | 55.81 | 3.57 | 0.6 | 261.83 Cr | 15.06% | 581.69% | 50.22% | 18602.67 | 5.67% | 24.21% | 17.57% | 1.83% | 8.89% | 448.82% | 27.77% | FMCG | 23316.23 | 13.78% | 20.03% | 8.98 | 5229605 | |||||
₹1,265.80 | BUY | LARGE CAP | 1750 | 18.88 | 25.07 | 7.47 | 0.95 | 6666 Cr | 1.91% | 20.79% | 45479 | 2.22% | 6.06% | 33.99% | 16.41% | Technology | 517589.57 | 30.35% | 39.64% | 64.52 | 7599940 | |||||||||
₹193.47 | BUY | LARGE CAP | 219 | 23.1% | 29.57% | 82.34% | 170.47% | 26.46 | 27.95 | 1.21 | 1.46 | 2730.37 Cr | 56646.05 | 1.45% | Industrials | 243104.21 | 9% | 10.52% | 2.54 | 24413736 | ||||||||||
₹19.31 | MID CAP | 19 | 13.22% | 20.93% | 24.79% | 22.83% | 19.34 | 15.24 | 1.11 | 0.89 | 956.55 Cr | 43.99% | 90.36% | 129.92% | 9272.31 | 1.75% | 12.48% | 65.34% | 6.6% | 41.52% | 69.23% | 39.06% | Financial Services | 61284.42 | 4.51% | NA | 0.78 | 87147333 | ||
₹221.17 | BUY | LARGE CAP | 380 | 1.48% | 8.93% | 331.21% | 77.62% | 895.2 | -143 | 5.36 | 1.27 | 102 Cr | 56.92% | 50.14% | 16315 | 20.05% | 67.1% | 382.85% | 2.6% | 30.71% | Technology | 215974.85 | 6.33% | 7.08% | 0.58 | 65732459 | ||||
₹304.10 | HOLD | LARGE CAP | 355 | 50.58% | 11.04 | 20.85 | 7.55 | 0.52 | 5018.45 Cr | 68.92% | 126.1% | 19918.24 | 3.24% | 10.88% | 24.16% | 46.54% | 52.34% | 82.11% | Consumer Defensive | 387153.19 | 27.91% | 36.71% | 28.01 | 23319679 | ||||||
₹202.51 | HOLD | LARGE CAP | 260 | 4.93% | 15.96 | 25.07 | 4.36 | 0.8 | 3145 Cr | 18.95% | 7.96% | 23555.8 | 3.78% | 12.33% | 14.84% | 19.85% | Technology | 212099.79 | 17.89% | 21.54% | 12.62 | 19042475 | ||||||||
₹832.75 | BUY | LARGE CAP | 1165 | 6.33% | 7.47% | 17.16 | 15.24 | 2.79 | 0.93 | 19806.63 Cr | 1% | 10.51% | 86.04% | 126927.27 | 7.06% | 15.42% | 180.82% | 15.03% | Financial Services | 1283478.41 | 14.3% | NA | 47.985 | 46107561 |
Why should you invest in undervalued stocks?
1. Lower Risk
Compared to their overvalued counterparts, undervalued stocks inherently carry less risk. Since they are bought at a price lower than their actual value, the downside risk is minimised. This makes them an appealing option for conservative investors seeking safer investment avenues.
2. Potential for Substantial Returns
Investing in undervalued stocks provides an opportunity for significant returns. Once the market corrects its initial misjudgments, these stocks can appreciate considerably as they return to their true values, offering profitable outcomes for those who invested early.
3. Capitalising on Market Overreactions
The stock market is prone to emotional reactions, often resulting in stock mispricing. Astute investors can capitalize on this by purchasing stocks when they are unfairly devalued and waiting for the market’s inevitable correction.
4. Dividend Advantage
Often, undervalued stocks belong to established companies with stable dividend payouts. Investors can benefit from regular dividends while waiting for the stock’s price to adjust, ensuring a dual income stream through capital gains and dividends.
Frequently Asked Questions
How are undervalued stocks identified?
There are several methods to identify undervalued stocks, including analysing financial ratios like price-to-earnings (P/E), price-to-book (P/B), and price-to-cash-flow (P/CF) ratios, which can indicate if a stock is undervalued compared to its peers or historical averages. Qualitative factors like competitive advantages, management quality, and growth potential are also considered.
What are the potential benefits of investing in undervalued stocks?
The primary benefit of investing in undervalued stocks is the potential for higher returns when the market eventually recognises the stock's true value, leading to price appreciation.
What are the risks associated with undervalued stocks?
Undervalued stocks may remain undervalued for an extended period, leading to opportunity costs. Additionally, there is a risk that the stock is undervalued due to underlying fundamental issues with the company, which may lead to further price declines.