Yahoo Finance July 2024 Insight Into Indian Exchange Stocks Estimated Below Value
The Indian stock market has shown robust growth, rising by 44% over the past 12 months and gaining 1.1% in just the last week, with earnings expected to grow by 16% annually. In such a thriving market, identifying stocks that are potentially undervalued could offer investors a unique opportunity for value investment.
Top 10 Undervalued Stocks Based On Cash Flows In India
Name | Current Price | Fair Value (Est) | Discount (Est) |
Updater Services (NSEI:UDS) | ₹297.25 | ₹477.81 | 37.8% |
IOL Chemicals and Pharmaceuticals (BSE:524164) | ₹403.65 | ₹574.52 | 29.7% |
Vedanta (NSEI:VEDL) | ₹454.00 | ₹635.30 | 28.5% |
Strides Pharma Science (NSEI:STAR) | ₹948.85 | ₹1520.38 | 37.6% |
Mahindra Logistics (NSEI:MAHLOG) | ₹525.05 | ₹800.49 | 34.4% |
TV18 Broadcast (NSEI:TV18BRDCST) | ₹41.18 | ₹69.41 | 40.7% |
PVR INOX (NSEI:PVRINOX) | ₹1427.35 | ₹2229.08 | 36% |
Delhivery (NSEI:DELHIVERY) | ₹400.15 | ₹604.58 | 33.8% |
Camlin Fine Sciences (BSE:532834) | ₹103.22 | ₹155.05 | 33.4% |
Godrej Properties (NSEI:GODREJPROP) | ₹3207.90 | ₹4589.46 | 30.1% |
We're going to check out a few of the best picks from our screener tool
Fusion Micro Finance
Overview: Fusion Micro Finance Limited is a non-banking financial company in India that offers microfinance lending services to women entrepreneurs in rural and peri-rural areas, with a market capitalization of approximately ₹45.15 billion.
Operations: The company generates revenue primarily through microfinance activities, totaling approximately ₹12.57 billion.
Estimated Discount To Fair Value: 10.4%
Fusion Micro Finance, now Fusion Finance Limited, is trading at ₹448.75, below its estimated fair value of ₹500.61, indicating a 10.4% undervaluation based on discounted cash flow analysis. Despite robust revenue growth projections at 24.9% annually—outpacing the Indian market's 9.6%—its debt is poorly covered by operating cash flow, and return on equity is expected to be modest at 19.3%. Recent regulatory challenges and significant insider selling could pose risks, though the company has shown strong earnings growth in the past five years.
Godrej Properties
Overview: Godrej Properties Limited operates primarily in real estate construction and development across India, with a market capitalization of approximately ₹891.98 billion.
Operations: The company's revenue is mainly derived from real estate construction and development, totaling approximately ₹29.95 billion, with a smaller contribution of ₹0.41 billion from the hospitality sector.
Estimated Discount To Fair Value: 30.1%
Godrej Properties Limited, priced at ₹3207.9, appears undervalued by over 20% against a fair value of ₹4589.46 based on cash flow analysis. Despite challenges like debt not well covered by operating cash flow, the company shows promise with a projected annual earnings growth of 35.7%, significantly outpacing the Indian market forecast of 15.8%. Recent financials indicate robust year-on-year growth in net income and sales volumes, reinforcing its potential amidst competitive pressures.
Mahindra Logistics
Overview: Mahindra Logistics Limited operates as a provider of integrated logistics and mobility solutions both in India and internationally, with a market capitalization of approximately ₹37.83 billion.
Operations: The company's revenue is primarily generated from two segments: Supply Chain Management, which contributes ₹51.78 billion, and Enterprise Mobility Services at ₹3.28 billion.
Estimated Discount To Fair Value: 34.4%
Mahindra Logistics, trading at ₹525.05, is significantly undervalued by over 20% with a fair value estimate of ₹800.49. Despite a challenging fiscal year marked by a net loss of INR 547.4 million and weak earnings coverage for dividends, the company's strategic joint venture aimed at enhancing warehousing and trucking services shows potential for market expansion in India. Analysts forecast an improvement in profitability and revenue growth faster than the Indian market average, suggesting recovery prospects ahead.
Key Takeaways
Click here to access our complete index of 16 Undervalued Indian Stocks Based On Cash Flows.
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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:FUSION NSEI:GODREJPROP and NSEI:MAHLOG.
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