In This Article:
The Indian market has climbed 1.6% over the last week and is up 43% over the past 12 months, with earnings forecast to grow by 17% annually. In such a robust environment, identifying undervalued stocks that may be trading below their intrinsic value can offer significant opportunities for investors seeking growth potential.
Top 10 Undervalued Stocks Based On Cash Flows In India
| Name | Current Price | Fair Value (Est) | Discount (Est) |
| NIIT Learning Systems (NSEI:NIITMTS) | ₹452.65 | ₹714.64 | 36.7% |
| HEG (NSEI:HEG) | ₹2169.75 | ₹3922.74 | 44.7% |
| S Chand (NSEI:SCHAND) | ₹217.79 | ₹359.85 | 39.5% |
| Krsnaa Diagnostics (NSEI:KRSNAA) | ₹665.20 | ₹1165.33 | 42.9% |
| Prataap Snacks (NSEI:DIAMONDYD) | ₹788.55 | ₹1509.79 | 47.8% |
| RITES (NSEI:RITES) | ₹668.80 | ₹1047.53 | 36.2% |
| Texmaco Rail & Engineering (NSEI:TEXRAIL) | ₹256.15 | ₹396.62 | 35.4% |
| Piramal Pharma (NSEI:PPLPHARMA) | ₹186.76 | ₹289.56 | 35.5% |
| Strides Pharma Science (NSEI:STAR) | ₹1179.15 | ₹2032.10 | 42% |
| Yatra Online (NSEI:YATRA) | ₹132.31 | ₹220.17 | 39.9% |
Let's dive into some prime choices out of the screener.
Bandhan Bank
Overview: Bandhan Bank Limited provides banking and financial services for personal and business customers in India, with a market cap of ₹310.27 billion.
Operations: Bandhan Bank's revenue segments include Treasury (₹22.72 billion), Retail Banking (₹190.31 billion), Wholesale Banking (₹17.10 billion), and Other Banking Business (₹3.13 billion).
Estimated Discount To Fair Value: 10.3%
Bandhan Bank is trading at ₹192.6, below its estimated fair value of ₹214.81, indicating potential undervaluation based on cash flows. The bank's earnings and revenue are forecast to grow significantly faster than the Indian market, at 23.63% and 24.6% per year respectively. Despite a recent GST demand order impacting finances minimally (₹68,178), Bandhan Bank's high level of bad loans (3.8%) and low allowance for these loans (72%) remain concerns.
Orchid Pharma
Overview: Orchid Pharma Limited is a pharmaceutical company in India that develops, manufactures, and markets active pharmaceutical ingredients, bulk actives, finished dosage formulations, and nutraceuticals with a market cap of ₹71.51 billion.
Operations: Orchid Pharma generates revenue from active pharmaceutical ingredients, bulk actives, finished dosage formulations, and nutraceuticals in India.
Estimated Discount To Fair Value: 20.6%