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Over the last 7 days, the Indian market has dropped 1.7%, but it has risen by 43% over the past year. With earnings expected to grow by 17% per annum in the coming years, identifying undervalued stocks can present significant opportunities for investors looking to capitalize on potential market gains.
Top 10 Undervalued Stocks Based On Cash Flows In India
| Name | Current Price | Fair Value (Est) | Discount (Est) |
| NIIT Learning Systems (NSEI:NIITMTS) | ₹466.10 | ₹712.01 | 34.5% |
| HEG (NSEI:HEG) | ₹2100.65 | ₹3915.05 | 46.3% |
| S Chand (NSEI:SCHAND) | ₹225.92 | ₹352.58 | 35.9% |
| Krsnaa Diagnostics (NSEI:KRSNAA) | ₹688.65 | ₹1165.33 | 40.9% |
| RITES (NSEI:RITES) | ₹675.70 | ₹1047.37 | 35.5% |
| Prataap Snacks (NSEI:DIAMONDYD) | ₹820.45 | ₹1509.79 | 45.7% |
| Texmaco Rail & Engineering (NSEI:TEXRAIL) | ₹254.85 | ₹395.97 | 35.6% |
| Rajesh Exports (NSEI:RAJESHEXPO) | ₹295.45 | ₹590.75 | 50% |
| Piramal Pharma (NSEI:PPLPHARMA) | ₹185.84 | ₹289.56 | 35.8% |
| Strides Pharma Science (NSEI:STAR) | ₹1127.80 | ₹2032.10 | 44.5% |
Let's explore several standout options from the results in the screener.
IRB Infrastructure Developers
Overview: IRB Infrastructure Developers Limited operates in the infrastructure development sector in India with a market cap of ₹376.59 billion.
Operations: The company's revenue segments include toll collection, construction contracts, and airport development.
Estimated Discount To Fair Value: 11%
IRB Infrastructure Developers is trading 11% below its estimated fair value of ₹70.04, indicating potential undervaluation based on cash flows. Despite a low forecasted Return on Equity (8.3%) in three years and an unstable dividend track record, earnings are expected to grow significantly at 31.07% annually, outpacing the Indian market's growth rate of 16.9%. Recent Q1 results show increased revenue and net income compared to the previous year, supporting positive cash flow trends.
Jindal Steel & Power
Overview: Jindal Steel & Power Limited operates in the steel, mining, and infrastructure sectors in India and internationally with a market cap of ₹936.54 billion.
Operations: The company's revenue primarily comes from manufacturing steel products, amounting to ₹510.56 billion.
Estimated Discount To Fair Value: 23.9%
Jindal Steel & Power is trading 23.9% below its estimated fair value of ₹1,207.18, suggesting it may be undervalued based on cash flows. Despite a recent dip in net income to ₹13,401.5 million for Q1 2024 from ₹16,869.4 million last year, earnings are projected to grow at 24.06% annually over the next three years, outpacing the Indian market's growth rate of 16.9%. Recent M&A activity and solid production figures further highlight its potential for future cash flow improvements.