Indian Stocks That May Be Trading Below Estimated Fair Value
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Over the last 7 days, the Indian market has experienced a 3.6% decline, yet it remains up by an impressive 40% over the past year, with earnings anticipated to grow by 17% annually in the coming years. In such a fluctuating environment, identifying stocks that may be trading below their estimated fair value can offer potential opportunities for investors seeking to capitalize on long-term growth prospects.
Top 10 Undervalued Stocks Based On Cash Flows In India
| Name | Current Price | Fair Value (Est) | Discount (Est) |
| Everest Kanto Cylinder (NSEI:EKC) | ?188.79 | ?306.16 | 38.3% |
| Apollo Pipes (BSE:531761) | ?574.25 | ?1137.14 | 49.5% |
| Titagarh Rail Systems (NSEI:TITAGARH) | ?1120.15 | ?2151.07 | 47.9% |
| RITES (NSEI:RITES) | ?317.25 | ?517.81 | 38.7% |
| IOL Chemicals and Pharmaceuticals (BSE:524164) | ?452.40 | ?762.32 | 40.7% |
| Vedanta (NSEI:VEDL) | ?508.70 | ?931.52 | 45.4% |
| Orchid Pharma (NSEI:ORCHPHARMA) | ?1284.05 | ?2142.32 | 40.1% |
| Patel Engineering (BSE:531120) | ?55.71 | ?92.42 | 39.7% |
| Artemis Medicare Services (NSEI:ARTEMISMED) | ?267.80 | ?445.15 | 39.8% |
| Strides Pharma Science (NSEI:STAR) | ?1457.90 | ?2704.30 | 46.1% |
Here's a peek at a few of the choices from the screener.
Archean Chemical Industries
Overview: Archean Chemical Industries Limited manufactures and sells specialty marine chemicals in India and internationally, with a market cap of ?86.89 billion.
Operations: The company's revenue is primarily derived from its Marine Chemicals segment, amounting to ?11.99 billion.
Estimated Discount To Fair Value: 10.8%
Archean Chemical Industries is trading at ?704.15, below its estimated fair value of ?789.66, offering good relative value compared to peers. Despite recent regulatory penalties totaling over ?7 million and a drop in Q1 earnings to INR 448.57 million from the previous year, the company shows promising growth prospects with forecasted annual revenue and earnings growth rates of 28.4% and 34.2%, respectively, surpassing market averages.
Everest Kanto Cylinder
Overview: Everest Kanto Cylinder Limited, along with its subsidiaries, manufactures and sells gas cylinders in India, with a market cap of ?21.18 billion.
Operations: The company's revenue is primarily derived from the manufacturing and sale of gas cylinders in India.
Estimated Discount To Fair Value: 38.3%
Everest Kanto Cylinder, trading at ?188.79, is significantly undervalued against its estimated fair value of ?306.16, presenting a compelling opportunity based on cash flow analysis. Despite a volatile share price and an unstable dividend history, the company's recent earnings report shows strong performance with net income rising to INR 280.5 million for Q1 2024 from INR 217.5 million the previous year. Forecasts indicate robust annual profit growth of 27.51%, outpacing market averages.