Indian Stocks Estimated To Be Undervalued In October 2024
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Over the last 7 days, the Indian market has remained flat, yet it has shown a significant rise of 40% over the past year with earnings forecasted to grow by 17% annually. In such an environment, identifying stocks that are potentially undervalued can offer investors opportunities to capitalize on future growth while minimizing risk.
Top 10 Undervalued Stocks Based On Cash Flows In India
| Name | Current Price | Fair Value (Est) | Discount (Est) |
| Titagarh Rail Systems (NSEI:TITAGARH) | ₹1139.30 | ₹2164.31 | 47.4% |
| Sudarshan Chemical Industries (BSE:506655) | ₹1012.30 | ₹1829.70 | 44.7% |
| RITES (NSEI:RITES) | ₹300.50 | ₹517.43 | 41.9% |
| IOL Chemicals and Pharmaceuticals (BSE:524164) | ₹406.85 | ₹762.32 | 46.6% |
| Vedanta (NSEI:VEDL) | ₹475.00 | ₹901.25 | 47.3% |
| Patel Engineering (BSE:531120) | ₹53.64 | ₹91.29 | 41.2% |
| Orchid Pharma (NSEI:ORCHPHARMA) | ₹1312.95 | ₹2142.32 | 38.7% |
| Tarsons Products (NSEI:TARSONS) | ₹409.30 | ₹706.32 | 42.1% |
| Manorama Industries (BSE:541974) | ₹967.80 | ₹1665.51 | 41.9% |
| Strides Pharma Science (NSEI:STAR) | ₹1638.55 | ₹2704.30 | 39.4% |
Underneath we present a selection of stocks filtered out by our screen.
Archean Chemical Industries
Overview: Archean Chemical Industries Limited manufactures and sells specialty marine chemicals both in India and internationally, with a market cap of ₹81.31 billion.
Operations: The company generates its revenue primarily from the marine chemicals segment, amounting to ₹11.99 billion.
Estimated Discount To Fair Value: 18.1%
Archean Chemical Industries is trading at ₹646.05, below its estimated fair value of ₹788.62, indicating undervaluation based on cash flows. With revenue growth forecasted at 28.5% per year, significantly outpacing the Indian market's 10.1%, and expected earnings growth of 34% annually over three years, it shows strong potential despite recent regulatory penalties and a decline in first-quarter earnings compared to the previous year.
Bandhan Bank
Overview: Bandhan Bank Limited provides banking and financial services to personal and business customers in India, with a market cap of ₹297.85 billion.
Operations: The company's revenue segments include Treasury at ₹22.72 billion, Retail Banking at ₹190.31 billion, Wholesale Banking at ₹17.10 billion, and Other Banking Business at ₹3.13 billion.
Estimated Discount To Fair Value: 11.8%
Bandhan Bank, trading at ₹184.89, is undervalued relative to its fair value of ₹209.54 based on cash flows. The bank anticipates robust revenue growth of 24.5% annually, surpassing the market's 10.1%, with earnings expected to grow significantly at 23.2% per year over three years despite a high bad loans ratio of 3.8%. Recent regulatory issues concerning GST matters have not materially impacted financials or operations.