In This Article:
Over the last 7 days, the Indian market has risen 2.5%, driven by gains in every sector, and over the past year, it has climbed 45%. In this thriving environment where earnings are forecast to grow by 16% annually, identifying undervalued stocks can provide significant opportunities for investors looking to capitalize on potential growth.
Top 10 Undervalued Stocks Based On Cash Flows In India
| Name | Current Price | Fair Value (Est) | Discount (Est) |
| Shyam Metalics and Energy (NSEI:SHYAMMETL) | ₹716.85 | ₹1041.17 | 31.1% |
| HEG (NSEI:HEG) | ₹2195.85 | ₹3310.12 | 33.7% |
| Updater Services (NSEI:UDS) | ₹317.55 | ₹537.05 | 40.9% |
| Venus Pipes and Tubes (NSEI:VENUSPIPES) | ₹2250.85 | ₹3598.27 | 37.4% |
| Vedanta (NSEI:VEDL) | ₹447.20 | ₹722.69 | 38.1% |
| Rajesh Exports (NSEI:RAJESHEXPO) | ₹315.70 | ₹508.03 | 37.9% |
| Mahindra Logistics (NSEI:MAHLOG) | ₹524.00 | ₹854.67 | 38.7% |
| Piramal Pharma (NSEI:PPLPHARMA) | ₹173.82 | ₹246.83 | 29.6% |
| Delhivery (NSEI:DELHIVERY) | ₹406.15 | ₹751.07 | 45.9% |
| Godrej Properties (NSEI:GODREJPROP) | ₹3181.05 | ₹5542.84 | 42.6% |
Let's uncover some gems from our specialized screener.
Fusion Finance
Overview: Fusion Finance Limited, a non-banking financial company with a market cap of ₹43.42 billion, provides microfinance lending services to women entrepreneurs in rural and semi-urban areas in India.
Operations: Revenue from micro financing activities amounts to ₹12.57 billion.
Estimated Discount To Fair Value: 12.5%
Fusion Finance, trading at ₹431.55, is undervalued compared to its estimated fair value of ₹493.46 and peers in the industry. Despite recent regulatory challenges, including income tax and GST show cause notices, the company’s earnings have grown 41.6% annually over the past five years and are forecasted to grow 18.23% per year moving forward. With revenue expected to increase by 24.8% annually, Fusion Finance demonstrates strong cash flow potential amidst market uncertainties.
Mahindra Logistics
Overview: Mahindra Logistics Limited offers integrated logistics and mobility solutions in India and internationally, with a market cap of ₹37.75 billion.
Operations: Revenue from the company's operations is derived primarily from Supply Chain Management, contributing ₹53.04 billion, and Enterprise Mobility Services, which adds ₹3.29 billion.
Estimated Discount To Fair Value: 38.7%
Mahindra Logistics, trading at ₹524, is significantly undervalued with a fair value estimate of ₹854.67. The company is forecasted to grow revenue by 12% annually and become profitable within three years. Despite recent losses and regulatory penalties, its earnings are expected to rise by 65.06% per year. However, interest payments are not well covered by earnings, and the dividend yield of 0.48% is unsustainable based on current profits.