Pasupati Acrylon and OCL India are stocks on my list that are potentially undervalued. This means their current share prices are trading well-below what the companies are actually worth. Smart investors can make money from this discrepancy by buying these shares, because they believe the current market prices will eventually move towards their true value. If you’re looking for capital gains in your next investment, I suggest you take a look at my list of potentially undervalued stocks.

Pasupati Acrylon Limited (BSE:500456)

Pasupati Acrylon Limited manufactures and sells acrylic fibers in India. Founded in 1982, and now run by Vineet Jain, the company employs 487 people and has a market cap of INR ₹2.50B, putting it in the mid-cap group.

500456’s shares are currently floating at around -43% lower than its real value of INR49.58, at a price tag of INR28.05, according to my discounted cash flow model. This mismatch signals an opportunity to buy 500456 shares at a discount. What’s even more appeal is that 500456’s PE ratio stands at around 13.6x against its its luxury peer level of 12.5x, implying that relative to its comparable set of companies, we can buy 500456’s stock at a cheaper price today. 500456 is also strong in terms of its financial health, with near-term assets able to cover upcoming and long-term liabilities. Finally, its debt relative to equity is 9%, which has been falling over time, signifying its ability to reduce its debt obligations year on year.

OCL India Limited (BSE:502165)

OCL India Limited manufactures and sells cement and refractories in India. OCL India was started in 1949 and with the market cap of INR ₹84.31B, it falls under the large-cap category.

502165’s stock is now trading at -29% lower than its actual worth of INR2093.22, at a price of INR1481.75, according to my discounted cash flow model. This mismatch indicates a potential opportunity to buy low. In terms of relative valuation, 502165’s PE ratio is trading at around 22.1x while its basic materials peer level trades at 30.8x, meaning that relative to other stocks in the industry, you can buy 502165 for a cheaper price. 502165 is also a financially healthy company, with current assets covering liabilities in the near term and over the long run. Finally, its debt relative to equity is 49%, which has been reducing for the last couple of years signifying its ability to pay down its debt.

Elnet Technologies Limited (BSE:517477)

Elnet Technologies Limited provides infrastructure services to software and business process outsourcing industries in India. Started in 1990, and currently headed by CEO Unnamalai Thiagarajan, the company employs 14 people and has a market cap of INR ₹752.60M, putting it in the small-cap group.

517477’s stock is now trading at -19% below its actual worth of INR232.54, at a price of INR188.15, based on my discounted cash flow model. This mismatch indicates a potential opportunity to buy low. In addition to this, 517477’s PE ratio stands at 9.6x compared to its real estate peer level of 27.5x, implying that relative to its peers, we can buy 517477’s stock at a cheaper price today. 517477 is also strong financially, as short-term assets amply cover upcoming and long-term liabilities. Finally, its debt relative to equity is 7%, which has been diminishing for the past few years signalling its capacity to reduce its debt obligations year on year.

For more financially sound, undervalued companies to add to your portfolio, you can use our free platform to explore our interactive list of undervalued stocks.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned.