Yahoo Finance June 2024 Insights Into Three Indian Exchange Stocks Estimated Below Market Value
The Indian stock market has shown robust growth, rising 2.7% in the last week and an impressive 45% over the past twelve months with earnings expected to grow by 16% annually. In this thriving market environment, identifying stocks that are estimated to be below market value could present valuable opportunities for investors.
Top 10 Undervalued Stocks Based On Cash Flows In India
Name | Current Price | Fair Value (Est) | Discount (Est) |
Updater Services (NSEI:UDS) | ₹293.85 | ₹477.54 | 38.5% |
Allied Digital Services (NSEI:ADSL) | ₹149.71 | ₹227.60 | 34.2% |
IOL Chemicals and Pharmaceuticals (BSE:524164) | ₹408.75 | ₹574.52 | 28.9% |
Mahindra Logistics (NSEI:MAHLOG) | ₹467.35 | ₹801.29 | 41.7% |
Strides Pharma Science (NSEI:STAR) | ₹978.70 | ₹1520.38 | 35.6% |
TV18 Broadcast (NSEI:TV18BRDCST) | ₹43.96 | ₹70.93 | 38% |
PVR INOX (NSEI:PVRINOX) | ₹1390.30 | ₹2211.86 | 37.1% |
Delhivery (NSEI:DELHIVERY) | ₹406.45 | ₹613.32 | 33.7% |
Camlin Fine Sciences (BSE:532834) | ₹111.16 | ₹157.63 | 29.5% |
Godrej Properties (NSEI:GODREJPROP) | ₹2998.50 | ₹4563.46 | 34.3% |
Here we highlight a subset of our preferred stocks from the screener
Delhivery
Overview: Delhivery Limited is a logistics and supply chain company in India, serving industries ranging from e-commerce to manufacturing, with a market cap of approximately ₹300.18 billion.
Operations: The company generates ₹81.42 billion from logistics services.
Estimated Discount To Fair Value: 33.7%
Delhivery, priced at ₹406.45 against a fair value of ₹613.32, shows potential undervaluation based on DCF analysis, indicating more than 20% below its intrinsic value. Despite a forecasted modest ROE of 7.6% in three years, it's expected to turn profitable with earnings growth projected at 60.76% annually. Recent strategic moves include expanding B2B operations for SUGAR Cosmetics and forming Delhivery Robotics India Pvt., enhancing its service capabilities and market reach amidst executive transitions and ongoing business expansions.
According our earnings growth report, there's an indication that Delhivery might be ready to expand.
Get an in-depth perspective on Delhivery's balance sheet by reading our health report here.
Godrej Properties
Overview: Godrej Properties Limited, operating primarily in India, focuses on real estate construction and development, with a market capitalization of approximately ₹833.75 billion.
Operations: The company generates revenue primarily from real estate development, totaling ₹29.95 billion, with a smaller segment in hospitality bringing in ₹0.41 billion.
Estimated Discount To Fair Value: 34.3%
Godrej Properties, trading at ₹2998.5, is significantly undervalued by 34.3% against a fair value of ₹4563.46 based on DCF analysis. Its earnings and revenue are forecast to grow at 32.38% and 31.7% per year respectively, outpacing the Indian market averages significantly. However, its debt coverage by operating cash flow is weak, and recent financial results show large one-off items affecting earnings quality despite strong annual growth in net income and revenue as reported in May 2024.
RITES
Overview: RITES Limited offers consultancy, engineering, and project management services across various sectors including railways, highways, airports, and more, with a market capitalization of approximately ₹169.46 billion.
Operations: RITES Limited generates revenue through diverse segments, including domestic consultancy at ₹11.94 billion, domestic turnkey construction projects at ₹9.03 billion, domestic leasing at ₹1.38 billion, export sales at ₹1.03 billion, and consultancy abroad at ₹0.95 billion.
Estimated Discount To Fair Value: 15.3%
RITES, priced at ₹705.2, trades below its calculated fair value of ₹832.71, reflecting a modest undervaluation. The company's earnings are expected to grow by 18.5% annually, slightly above the market forecast of 16%. Although this growth rate is robust, it doesn't qualify as high under typical metrics that consider over 20% growth significant. Revenue projections also indicate an above-market growth rate of 13.4%, compared to the market's 9.6%. Recent strategic initiatives include securing new contracts and partnerships aimed at enhancing locomotive maintenance and operations, which could support future cash flows despite current dividends not being well covered by earnings or cash flow.
Summing It All Up
Dive into all 15 of the Undervalued Indian Stocks Based On Cash Flows we have identified 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.
Streamline your investment strategy with Simply Wall St's app for free and benefit from extensive research on stocks across all corners of the world.
Seeking Other Investments?
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:DELHIVERY NSEI:RITES.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
