Lahoti Overseas and Vijay Shanthi Builders 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.

Lahoti Overseas Limited (BSE:531842)

Lahoti Overseas Limited, together with its subsidiaries, engages in the export trading of cotton yarns and fabrics. Lahoti Overseas was formed in 1990 and has a market cap of INR ₹495.92M, putting it in the small-cap group.

531842’s stock is now hovering at around -45% beneath its intrinsic level of INR31, at the market price of ₹17.00, based on my discounted cash flow model. signalling an opportunity to buy the stock at a low price. In addition to this, 531842’s PE ratio is currently around 13.18x while its Retail Distributors peer level trades at, 52.03x suggesting that relative to its competitors, you can buy 531842’s shares at a cheaper price. 531842 is also a financially healthy company, with short-term assets covering liabilities in the near future as well as in the long run. It’s debt-to-equity ratio of 58.17% has been reducing for the past few years showing its ability to reduce its debt obligations year on year. More detail on Lahoti Overseas here.

Vijay Shanthi Builders Limited (BSE:523724)

Vijay Shanthi Builders Limited engages in the real estate development business in Chennai, India. Founded in 1977, and headed by CEO Chandan Jain, the company provides employment to 70 people and has a market cap of INR ₹324.74M, putting it in the small-cap stocks category.

523724’s shares are currently hovering at around -70% below its value of INR41.75, at a price of ₹12.40, based on its expected future cash flows. This mismatch indicates a chance to invest in 523724 at a discounted price. Moreover, 523724’s PE ratio stands at around 6.88x relative to its Real Estate peer level of, 23.78x indicating that relative to its competitors, you can buy 523724 for a cheaper price. 523724 is also strong financially, with near-term assets able to cover upcoming and long-term liabilities. It’s debt-to-equity ratio of 28.26% has been declining for the last couple of years revealing 523724’s capability to reduce its debt obligations year on year. Dig deeper into Vijay Shanthi Builders here.