The Indian market has remained flat over the past week but has seen a remarkable 45% increase over the last year, with earnings projected to grow by 17% annually. In such an environment, identifying stocks that are potentially undervalued can be crucial for investors looking to capitalize on future growth opportunities.
Top 10 Undervalued Stocks Based On Cash Flows In India
| Name | Current Price | Fair Value (Est) | Discount (Est) |
| Apollo Pipes (BSE:531761) | ₹587.90 | ₹1136.87 | 48.3% |
| Titagarh Rail Systems (NSEI:TITAGARH) | ₹1188.60 | ₹2156.19 | 44.9% |
| RITES (NSEI:RITES) | ₹334.25 | ₹517.34 | 35.4% |
| IOL Chemicals and Pharmaceuticals (BSE:524164) | ₹474.90 | ₹762.32 | 37.7% |
| Vedanta (NSEI:VEDL) | ₹516.15 | ₹935.93 | 44.9% |
| Patel Engineering (BSE:531120) | ₹56.88 | ₹93.15 | 38.9% |
| Orchid Pharma (NSEI:ORCHPHARMA) | ₹1334.65 | ₹2142.32 | 37.7% |
| Artemis Medicare Services (NSEI:ARTEMISMED) | ₹284.55 | ₹445.15 | 36.1% |
| Tarsons Products (NSEI:TARSONS) | ₹448.50 | ₹709.99 | 36.8% |
| Strides Pharma Science (NSEI:STAR) | ₹1401.00 | ₹2704.30 | 48.2% |
Let's dive into some prime choices out of the screener.
Prataap Snacks (NSEI:DIAMONDYD)
Overview: Prataap Snacks Limited is involved in the manufacture and sale of packaged snacks both in India and internationally, with a market capitalization of ₹25.63 billion.
Operations: The company's revenue is primarily derived from the Snacks Food segment, amounting to ₹16.52 billion.
Estimated Discount To Fair Value: 28.9%
Prataap Snacks appears undervalued, trading at ₹1,073.5 against a fair value estimate of ₹1,509.79. Despite slower revenue growth forecasted at 11.1% annually compared to the market's 10.1%, its earnings are expected to grow significantly at 25.2% per year, outpacing the Indian market average of 17.3%. Recent M&A activity includes Authum Investment & Infrastructure's offer to acquire a substantial stake in Prataap Snacks for INR 8.5 billion, highlighting investor interest despite insider selling concerns.
- Upon reviewing our latest growth report, Prataap Snacks' projected financial performance appears quite optimistic.
- Delve into the full analysis health report here for a deeper understanding of Prataap Snacks.
Jindal Steel & Power (NSEI:JINDALSTEL)
Overview: Jindal Steel & Power Limited is engaged in the steel, mining, and infrastructure sectors both in India and internationally, with a market cap of ₹1.06 trillion.
Operations: The company generates revenue primarily from manufacturing steel products, amounting to ₹510.56 billion.
Estimated Discount To Fair Value: 14.0%
Jindal Steel & Power is trading at ₹1,035.35, below its fair value estimate of ₹1,204.32. Its earnings are projected to grow significantly at 25% annually over the next three years, surpassing the Indian market's average growth rate of 17.3%. The company has recently announced a major green hydrogen initiative with Jindal Renewables, underscoring its commitment to decarbonization and potentially enhancing long-term cash flow sustainability through reduced carbon emissions and energy costs.
- In light of our recent growth report, it seems possible that Jindal Steel & Power's financial performance will exceed current levels.
- Click here and access our complete balance sheet health report to understand the dynamics of Jindal Steel & Power.
Vedanta (NSEI:VEDL)
Overview: Vedanta Limited is a diversified natural resources company involved in the exploration, extraction, and processing of minerals, oil, and gas across India and internationally with a market capitalization of ₹2.01 trillion.
Operations: The company's revenue segments include Power (₹62.54 billion), Copper (₹197.31 billion), Iron Ore (₹83.51 billion), Aluminium (₹499.81 billion), Oil and Gas (₹179.05 billion), and Zinc - International (₹32.06 billion).
Estimated Discount To Fair Value: 44.9%
Vedanta Limited is trading at ₹516.15, significantly undervalued compared to its estimated fair value of ₹935.93, despite a high debt level. Earnings are forecasted to grow substantially at 41.8% annually over the next three years, outpacing the Indian market's growth rate of 17.3%. The company's planned demerger into independent business units could simplify its structure and attract direct investments, potentially improving cash flows despite recent regulatory challenges and executive changes.
- Insights from our recent growth report point to a promising forecast for Vedanta's business outlook.
- Take a closer look at Vedanta's balance sheet health here in our report.
Taking Advantage
- Click here to access our complete index of 26 Undervalued Indian Stocks Based On Cash Flows.
- Have you diversified into these companies? Leverage the power of Simply Wall St's portfolio to keep a close eye on market movements affecting your investments.
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Searching for a Fresh Perspective?
- Explore high-performing small cap companies that haven't yet garnered significant analyst attention.
- Diversify your portfolio with solid dividend payers offering reliable income streams to weather potential market turbulence.
- Fuel your portfolio with companies showing strong growth potential, backed by optimistic outlooks both from analysts and management.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Valuation is complex, but we're here to simplify it.
Discover if Prataap Snacks might be undervalued or overvalued with our detailed analysis, featuring fair value estimates, potential risks, dividends, insider trades, and its financial condition.
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