The Indian market has experienced a flat performance over the last week, yet it has seen a remarkable 40% increase over the past year with earnings projected to grow by 17% annually. In such conditions, identifying stocks that may be trading below their estimated value can offer investors potential opportunities for growth and diversification.
Top 10 Undervalued Stocks Based On Cash Flows In India
|
Name |
Current Price |
Fair Value (Est) |
Discount (Est) |
|
Titagarh Rail Systems (NSEI:TITAGARH) |
₹1197.50 |
₹2143.10 |
44.1% |
|
RITES (NSEI:RITES) |
₹302.90 |
₹517.46 |
41.5% |
|
IOL Chemicals and Pharmaceuticals (BSE:524164) |
₹420.20 |
₹762.32 |
44.9% |
|
Vedanta (NSEI:VEDL) |
₹480.85 |
₹903.15 |
46.8% |
|
Patel Engineering (BSE:531120) |
₹55.27 |
₹91.80 |
39.8% |
|
IRB Infrastructure Developers (NSEI:IRB) |
₹57.27 |
₹91.13 |
37.2% |
|
Artemis Medicare Services (NSEI:ARTEMISMED) |
₹274.05 |
₹445.15 |
38.4% |
|
Tarsons Products (NSEI:TARSONS) |
₹412.65 |
₹706.66 |
41.6% |
|
Manorama Industries (BSE:541974) |
₹932.30 |
₹1665.51 |
44% |
|
Strides Pharma Science (NSEI:STAR) |
₹1628.90 |
₹2704.30 |
39.8% |
Let’s review some notable picks from our screened stocks.
Overview: IRB Infrastructure Developers Limited operates in the infrastructure development sector in India, with a market capitalization of ₹345.85 billion.
Operations: The company’s revenue is primarily derived from its Construction segment, which accounts for ₹51.92 billion, and BOT/TOT Projects, contributing ₹24.16 billion.
Estimated Discount To Fair Value: 37.2%
IRB Infrastructure Developers appears undervalued, trading at ₹57.27 below its estimated fair value of ₹91.13, with analysts forecasting a 26% price increase. Despite an unstable dividend history and insufficient earnings to cover interest payments, the company shows promising growth potential with earnings expected to rise significantly at 32.1% annually, outpacing the Indian market’s 17.4%. Recent debt financing efforts may support future capital expenditures and acquisitions, enhancing cash flow prospects.
Overview: Jindal Stainless Limited manufactures and sells stainless-steel flat products in India and internationally, with a market cap of ₹611.77 billion.
Operations: The company’s revenue is primarily derived from its stainless steel products segment, amounting to ₹377.88 billion.
Estimated Discount To Fair Value: 29.8%
Jindal Stainless is trading at ₹742.95, significantly below its estimated fair value of ₹1058.92, indicating it may be undervalued based on cash flows. Despite a recent decline in net income and earnings per share compared to the previous year, the company’s forecasted annual earnings growth of 30.1% surpasses the Indian market’s average growth rate. Strategic partnerships in sustainable mobility and high-quality material supply for national projects could enhance future revenue streams and support cash flow improvements.
Overview: Rossari Biotech Limited is involved in the manufacture and sale of specialty chemicals both in India and internationally, with a market cap of ₹48.42 billion.
Operations: Rossari Biotech Limited’s revenue is primarily derived from the manufacture and sale of specialty chemicals, serving both domestic and international markets.
Estimated Discount To Fair Value: 25.4%
Rossari Biotech is trading at ₹875.8, below its estimated fair value of ₹1173.77, suggesting it could be undervalued based on cash flows. The company reported increased net income and earnings per share for the recent quarter compared to last year. With forecasted earnings growth of 22.1% annually, surpassing the Indian market’s average, Rossari’s strategic expansion in Gujarat may bolster future revenue and cash flow potential despite a modest return on equity outlook.
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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.
Companies discussed in this article include NSEI:IRB NSEI:JSL and NSEI:ROSSARI.
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