3 Indian Stocks Estimated To Be Trading Below Intrinsic Value

Over the last 7 days, the Indian market has experienced a 2.7% drop, yet it remains up by an impressive 40% over the past year, with earnings projected to grow by 17% annually in the coming years. In such a fluctuating environment, identifying stocks trading below their intrinsic value can offer investors potential opportunities for long-term growth and resilience.

Top 10 Undervalued Stocks Based On Cash Flows In India

Name	Current Price	Fair Value (Est)	Discount (Est)
Titagarh Rail Systems (NSEI:TITAGARH)	₹1081.90	₹2151.63	49.7%
RITES (NSEI:RITES)	₹313.95	₹517.62	39.3%
IOL Chemicals and Pharmaceuticals (BSE:524164)	₹430.00	₹762.32	43.6%
Vedanta (NSEI:VEDL)	₹492.50	₹902.90	45.5%
Patel Engineering (BSE:531120)	₹55.19	₹91.95	40%
Orchid Pharma (NSEI:ORCHPHARMA)	₹1386.25	₹2142.32	35.3%
Artemis Medicare Services (NSEI:ARTEMISMED)	₹273.80	₹445.15	38.5%
Tarsons Products (NSEI:TARSONS)	₹439.70	₹709.39	38%
Manorama Industries (BSE:541974)	₹894.25	₹1665.51	46.3%
Strides Pharma Science (NSEI:STAR)	₹1515.45	₹2704.30	44%

Click here to see the full list of 28 stocks from our Undervalued Indian Stocks Based On Cash Flows screener.

Let's take a closer look at a couple of our picks from the screened companies.

HIL (NSEI:HIL)

Overview: HIL Limited is engaged in the production and distribution of building materials and other solutions both in India and internationally, with a market cap of ₹21.66 billion.

Operations: The company's revenue segments include Polymer Solutions at ₹6.10 billion, Roofing Solutions at ₹11.44 billion, Building Solutions at ₹5.46 billion, and Flooring Solutions at ₹11.63 billion.

Estimated Discount To Fair Value: 19%

HIL is trading at ₹2864.95, below its estimated fair value of ₹3537.28, offering a 19% discount based on discounted cash flow analysis. Despite recent management changes and a significant drop in net income from INR 578.6 million to INR 126.2 million year-over-year, the company is expected to become profitable within three years with above-average market growth prospects. However, interest payments are not well covered by earnings, indicating financial caution may be necessary.

• The growth report we've compiled suggests that HIL's future prospects could be on the up.
• Delve into the full analysis health report here for a deeper understanding of HIL.

Krsnaa Diagnostics (NSEI:KRSNAA)

Overview: Krsnaa Diagnostics Limited offers diagnostic services in India and has a market cap of ₹27.76 billion.

Operations: The company's revenue primarily comes from its Radiology and Pathology Services segment, which generated ₹6.50 billion.

Estimated Discount To Fair Value: 26.2%

Krsnaa Diagnostics is trading at ₹859.8, below its estimated fair value of ₹1165.33, indicating it may be undervalued based on discounted cash flow analysis. Despite past shareholder dilution, the company is expected to experience significant earnings growth of 36.9% annually over the next three years, outpacing the Indian market's average growth rate. However, its dividend yield of 0.29% is not well-covered by free cash flows, necessitating careful consideration for income-focused investors. Recent contracts in Jharkhand and Madhya Pradesh could enhance revenue streams further.

• According our earnings growth report, there's an indication that Krsnaa Diagnostics might be ready to expand.
• Click here to discover the nuances of Krsnaa Diagnostics with our detailed financial health report.

Strides Pharma Science (NSEI:STAR)

Overview: Strides Pharma Science Limited develops, manufactures, and sells pharmaceutical products across Africa, Australia, North America, Europe, Asia, India, and internationally with a market cap of ₹139.36 billion.

Operations: The company's revenue from its pharmaceutical business, excluding the bio-pharmaceutical segment, amounts to ₹42.09 billion.

Estimated Discount To Fair Value: 44%

Strides Pharma Science, currently trading at ₹1515.45, is significantly undervalued with an estimated fair value of ₹2704.3 based on discounted cash flow analysis. The company has shown a strong recovery with recent earnings reporting a net income of INR 702.02 million compared to a loss the previous year. Additionally, Strides has reduced its debt burden by redeeming non-convertible debentures worth INR 1 billion since September, strengthening its financial position further.

• Insights from our recent growth report point to a promising forecast for Strides Pharma Science's business outlook.
• Click to explore a detailed breakdown of our findings in Strides Pharma Science's balance sheet health report.

Summing It All Up

• Dive into all 28 of the Undervalued Indian Stocks Based On Cash Flows we have identified here.
• Got skin in the game with these stocks? Elevate how you manage them by using Simply Wall St's portfolio, where intuitive tools await to help optimize your investment outcomes.
• Simply Wall St is your key to unlocking global market trends, a free user-friendly app for forward-thinking investors.

Looking For Alternative Opportunities?

• 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.

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