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In the last week, the Indian market has stayed flat, while the Communication Services sector gained 4.7%, contributing to an impressive 45% rise over the past year. With earnings forecasted to grow by 17% annually, identifying undervalued stocks can be a strategic move for investors looking to capitalize on potential market inefficiencies.
Top 10 Undervalued Stocks Based On Cash Flows In India
| Name | Current Price | Fair Value (Est) | Discount (Est) |
| Everest Kanto Cylinder (NSEI:EKC) | ₹187.06 | ₹306.08 | 38.9% |
| Apollo Pipes (BSE:531761) | ₹604.85 | ₹1147.92 | 47.3% |
| Krsnaa Diagnostics (NSEI:KRSNAA) | ₹713.40 | ₹1165.33 | 38.8% |
| Venus Pipes and Tubes (NSEI:VENUSPIPES) | ₹2385.05 | ₹4380.61 | 45.6% |
| IOL Chemicals and Pharmaceuticals (BSE:524164) | ₹442.00 | ₹762.32 | 42% |
| Updater Services (NSEI:UDS) | ₹343.50 | ₹621.14 | 44.7% |
| Prataap Snacks (NSEI:DIAMONDYD) | ₹857.75 | ₹1509.79 | 43.2% |
| Patel Engineering (BSE:531120) | ₹53.64 | ₹91.76 | 41.5% |
| Artemis Medicare Services (NSEI:ARTEMISMED) | ₹264.30 | ₹445.15 | 40.6% |
| Rajesh Exports (NSEI:RAJESHEXPO) | ₹295.15 | ₹586.23 | 49.7% |
Let's explore several standout options from the results in the screener.
Artemis Medicare Services
Overview: Artemis Medicare Services Limited manages and operates multi-specialty hospitals in India and internationally, with a market cap of ₹36.37 billion.
Operations: Artemis Medicare Services Limited generates revenue primarily from healthcare services, amounting to ₹8.92 billion.
Estimated Discount To Fair Value: 40.6%
Artemis Medicare Services appears undervalued based on cash flows, trading at ₹264.3, significantly below its estimated fair value of ₹445.15. Despite high debt levels, the company has shown robust earnings growth of 40% over the past year and is forecast to grow earnings by 45.4% annually, outpacing the Indian market's average growth rate. Recent quarterly results also reflect strong performance with increased revenue and net income compared to last year.
Fusion Finance
Overview: Fusion Finance Limited, a non-banking financial company with a market cap of ₹31.24 billion, provides microfinance lending services to women entrepreneurs in rural and semi-urban areas in India.
Operations: The company's revenue from micro financing activities amounts to ₹10.98 billion.
Estimated Discount To Fair Value: 18.5%
Fusion Finance is trading at ₹310.4, below its estimated fair value of ₹380.67, indicating it may be undervalued based on cash flows. The company's revenue is forecast to grow 29.4% per year, significantly outpacing the Indian market's 10% growth rate. However, earnings are expected to grow by 24.7%, and recent financial results show a net loss of ₹356.2 million for Q1 2024 compared to a net income of ₹1,204.6 million last year.