Godrej Properties And 2 More Indian Exchange Stocks That Investors Might Consider Undervalued

The Indian stock market has shown robust growth, with a 1.9% increase in the last week and an impressive 45% rise over the past 12 months, alongside expectations of a 16% annual earnings growth in the coming years. In such a thriving market, identifying stocks that may be undervalued could offer potential opportunities for investors looking for value and growth prospects.

Top 10 Undervalued Stocks Based On Cash Flows In India

Name	Current Price	Fair Value (Est)	Discount (Est)
Updater Services (NSEI:UDS)	₹311.40	₹540.98	42.4%
IOL Chemicals and Pharmaceuticals (BSE:524164)	₹423.20	₹636.71	33.5%
Rajesh Exports (NSEI:RAJESHEXPO)	₹288.45	₹503.07	42.7%
Strides Pharma Science (NSEI:STAR)	₹950.40	₹1664.05	42.9%
Vedanta (NSEI:VEDL)	₹469.10	₹734.03	36.1%
Mahindra Logistics (NSEI:MAHLOG)	₹517.80	₹903.50	42.7%
TV18 Broadcast (NSEI:TV18BRDCST)	₹45.06	₹nan	nan%
Delhivery (NSEI:DELHIVERY)	₹398.25	₹742.71	46.4%
PVR INOX (NSEI:PVRINOX)	₹1469.95	₹2552.85	42.4%
Godrej Properties (NSEI:GODREJPROP)	₹3306.25	₹5723.25	42.2%

Click here to see the full list of 16 stocks from our Undervalued Indian Stocks Based On Cash Flows screener.

We'll examine a selection from our screener results

Godrej Properties

Overview: Godrej Properties Limited, along with its subsidiaries, focuses on real estate construction and development in India, boasting a market capitalization of approximately ₹919.33 billion.

Operations: The company generates revenue primarily from real estate construction and development, amounting to ₹29.95 billion, with a smaller segment in hospitality bringing in ₹0.41 billion.

Estimated Discount To Fair Value: 42.2%

Godrej Properties, trading at ₹3330.65, significantly below its estimated fair value of ₹5743.83, appears undervalued based on cash flows and discounted cash flow analysis. Despite challenges in covering debt with operating cash flow and the impact of large one-off items on earnings, the company's financial performance is strong with a notable increase in net income and revenue growth outpacing the market substantially at 31.7% annually. Recent results show robust year-over-year gains in sales and net income, reinforcing its growth trajectory amidst a competitive Indian real estate market.

• The analysis detailed in our Godrej Properties growth report hints at robust future financial performance.

• Take a closer look at Godrej Properties' balance sheet health here in our report.

NSEI:GODREJPROP Discounted Cash Flow as at Jul 2024

Shyam Metalics and Energy

Overview: Shyam Metalics and Energy Limited is an integrated metal company based in India, specializing in the production and sale of long steel products and ferro alloys, with a market capitalization of approximately ₹200.96 billion.

Operations: The company generates ₹131.95 billion primarily from the sale of long steel products and ferro alloys.

Estimated Discount To Fair Value: 28.2%

Shyam Metalics and Energy, priced at ₹721.85, is perceived as undervalued when evaluated against its estimated fair value of ₹1006.19 based on discounted cash flow analysis. The company's revenue growth is projected to exceed the market with a substantial annual increase of 25.5%. Despite this potential, the dividend coverage by cash flows remains a concern. The recent appointment of Mr. Chandra Shekhar Verma as an Independent Director could strategically enhance decision-making processes and foster further growth in the steel sector for Shyam Metalics.

• The growth report we've compiled suggests that Shyam Metalics and Energy's future prospects could be on the up.

• Click to explore a detailed breakdown of our findings in Shyam Metalics and Energy's balance sheet health report.

NSEI:SHYAMMETL Discounted Cash Flow as at Jul 2024

Vedanta

Overview: Vedanta Limited is a diversified natural resources company operating in sectors such as minerals, and oil and gas, with operations spanning India, Europe, China, the United States, and Mexico; it has a market cap of approximately ₹1.74 trillion.

Operations: The company's revenue is primarily generated from Aluminium (₹483.71 billion), Zinc - India (₹279.25 billion), Copper (₹197.30 billion), Oil and Gas (₹178.37 billion), Power (ₗ61.53 billion), Iron Ore (₹90.69 billion), and Zinc - International (₹35.56 billion).

Estimated Discount To Fair Value: 36.1%

Vedanta Limited, currently trading at ₹469.1, is significantly undervalued with a DCF-based fair value of ₹732.79, indicating a potential undervaluation of over 20%. Despite its high debt levels, Vedanta's return on equity is forecast to be very large in the next three years at 51.1%. However, its dividend sustainability is questionable as the current yield of 4.69% isn't well covered by earnings. Earnings are expected to grow robustly by 42.8% annually over the next three years, outpacing the Indian market's growth rate. Recent activities include plans to sell a stake and raise substantial funds through block deals and NCDs to potentially reduce debt burdens and streamline operations.

• Our earnings growth report unveils the potential for significant increases in Vedanta's future results.

• Navigate through the intricacies of Vedanta with our comprehensive financial health report here.

NSEI:VEDL Discounted Cash Flow as at Jul 2024

Key Takeaways

• Investigate our full lineup of 16 Undervalued Indian Stocks Based On Cash Flows right here.

• Are any of these part of your asset mix? Tap into the analytical power of Simply Wall St's portfolio to get a 360-degree view on how they're shaping up.

• Simply Wall St is a revolutionary app designed for long-term stock investors, it's free and covers every market in the world.

Want To Explore Some Alternatives?

• Explore high-performing small cap companies that haven't yet garnered significant analyst attention.

• Diversify your portfolio with solid dividend payers offering reliable income streams to weather potential market turbulence.

• Fuel your portfolio with companies showing strong growth potential, backed by optimistic outlooks both from analysts and management.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include NSEI:GODREJPROP NSEI:SHYAMMETL and NSEI:VEDL.

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