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Undervalued Stocks

Undervalued stocks refer to publicly traded companies whose current market price does not accurately reflect their intrinsic value or true worth. These value stocks are often overlooked or mispriced by the market, presenting potential investment opportunities for savvy value investors.

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Top Undervalued Stocks in India 2024

Name	Price	Analyst Rating	M Cap	Target Price	Alpha	1Y Return	3Y Return	5Y Return	PE	Industry PE	PB	Beta	Div Yld	Net Profit Qtr	Net Profit QoQ %	Net Profit YoY %	Net Profit 3Y Change %	Rev Qtr (in Cr)	Rev QoQ (in %)	Rev 1Y change %	Rev 3Y change %	Profit Mar Qtr	Profit Mar QoQ	Profit Mar 1Y Change%	Profit Mar 3Y Change%	Sector	M Cap	ROE	ROCE	EPS	Volume
ITC Ltd	₹440.20	BUY	LARGE CAP	537.1	-7.83%	-5.44%	99.41%	81.98%	28.29	26.61	7.41	0.7	3.21%	5054.43 Cr	-2.37%	6.54%	55.06%	20581.57	12.22%	-0.08%	43.85%	29.28%	-13%	6.63%	7.79%	Consumer Defensive	541569.38	29.21%	37.4%	15.722556476331	11270061
Asian Paints Ltd	₹2,261.00	HOLD	LARGE CAP	2643.41	-37.83%	-28.54%	-32.98%	22.3%	47.44	41.43	14.82	0.56	1.17%	693.66 Cr	-41.55%	32.47%	73.31%	8003.02	-10.51%	2.92%	63.47%	15.66%	-34.68%	28.72%	6.02%	Basic Materials	212519.86	31.29%	38.97%	57.94	878871
Sun Pharmaceuticals Industries Ltd	₹1,786.55	BUY	LARGE CAP	2048.19	29.97%	33.75%	111%	297.5%	38.75	54.95	16.41	0.49	0.83%	3030.67 Cr	5.55%	12.7%	322.31%	13264.22	5.91%	10.51%	44.77%	19.89%	-0.33%	1.99%	191.7%	Basic Materials	423074.74	12.05%	12.22%	40.21	1163986
Avenue Supermarts Ltd	₹3,620.65	HOLD	LARGE CAP	4416.48	-11.94%	-3.42%	-18.47%	86.95%	86.6	-280.81	15.29	0.26	NA	723.54 Cr	9.72%	6.61%	130.63%	15972.55	10.58%	18.56%	110.37%	4.99%	-0.78%	-10.07%	9.63%	Consumer Defensive	234325.72	15.06%	19.93%	38.97	244753
Coal India Ltd	₹387.65	BUY	LARGE CAP	508.24	-5.45%	3.19%	141.08%	92.72%	6.62	21.34	15.43	1.52	5.88%	6274.8 Cr	-42.66%	17.8%	194.19%	27271.3	-17.78%	2.95%	58.09%	26.26%	-30.26%	14.43%	86.09%	Basic Materials	233474.96	92.66%	69.45%	60.64	8380692
Varun Beverages Ltd	₹556.35	BUY	LARGE CAP	720.33	3.84%	13.07%	351.95%	721.91%	71.05	59.5	22.71	0.82	0.2%	628.83 Cr	-50.17%	35.59%	488.3%	4804.68	-33.24%	21.78%	112.35%	13.1%	-25.35%	11.34%	177.04%	Consumer Defensive	194335.38	28.19%	24.32%	6.472	9710175
Eicher Motors Ltd	₹5,012.30	BUY	LARGE CAP	4966.5	26.06%	35.79%	83.18%	134.6%	32.16	35.69	7.01	0.9	1.27%	1100.33 Cr	-0.1%	37.31%	197.06%	4186.38	-2.94%	14.5%	89.62%	24.2%	2.93%	19.92%	56.66%	Consumer Cyclical	138376.58	26.24%	33.01%	146.13	197564
Bharat Electronics Ltd	₹282.15	BUY	LARGE CAP	331.54	44.42%	49.92%	306.26%	706.14%	45.43	53.49	9.16	1.8	1.09%	1083.88 Cr	38.78%	34.1%	90.55%	4604.9	8.51%	14.29%	43.66%	19.45%	27.89%	17.34%	32.64%	Consumer Cyclical	201859.54	27.1%	33.71%	5.39	12741720
ABB India Ltd	₹6,527.50	HOLD	LARGE CAP	7728.52	29.2%	38.58%	175.59%	405.77%	298.47	127.76	16.66	1.31	NA	145.67 Cr	82.86%	-23.7%		2081.63	6.18%	2.13%		1.85%	72.22%	-25.29%		Industrials	133677.1	22.82%	30.39%	5.52560526008916	385172
Dr Reddys Laboratories Ltd	₹1,309.40	HOLD	LARGE CAP	1350.87	8.32%	15.88%	39.49%	113.98%	20.42	54.95	4.22	0.4	0.65%	1341.9 Cr	-3.63%	23.75%	185.81%	8016.1	4.48%	13.54%	47.06%	19.91%	-7.76%	8.99%	94.35%	Basic Materials	108704.58	19.42%	25.4%	66.882	1432206

Why should you invest in undervalued stocks?

1. Lower Risk

Compared to their overvalued counterparts, undervalued stocks inherently carry less risk. Since they are bought at a price lower than their actual value, the downside risk is minimised. This makes them an appealing option for conservative investors seeking safer investment avenues.

2. Potential for Substantial Returns

Investing in undervalued stocks provides an opportunity for significant returns. Once the market corrects its initial misjudgments, these stocks can appreciate considerably as they return to their true values, offering profitable outcomes for those who invested early.

3. Capitalising on Market Overreactions

The stock market is prone to emotional reactions, often resulting in stock mispricing. Astute investors can capitalize on this by purchasing stocks when they are unfairly devalued and waiting for the market’s inevitable correction.

4. Dividend Advantage

Often, undervalued stocks belong to established companies with stable dividend payouts. Investors can benefit from regular dividends while waiting for the stock’s price to adjust, ensuring a dual income stream through capital gains and dividends.

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Frequently Asked Questions

How are undervalued stocks identified?

There are several methods to identify undervalued stocks, including analysing financial ratios like price-to-earnings (P/E), price-to-book (P/B), and price-to-cash-flow (P/CF) ratios, which can indicate if a stock is undervalued compared to its peers or historical averages. Qualitative factors like competitive advantages, management quality, and growth potential are also considered.

What are the potential benefits of investing in undervalued stocks?

The primary benefit of investing in undervalued stocks is the potential for higher returns when the market eventually recognises the stock's true value, leading to price appreciation.

What are the risks associated with undervalued stocks?

Undervalued stocks may remain undervalued for an extended period, leading to opportunity costs. Additionally, there is a risk that the stock is undervalued due to underlying fundamental issues with the company, which may lead to further price declines.

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