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Undervalued Stocks in India – A Complete Guide for 2025
12 Sept 2025
3 mins read
Investors often seek undervalued stocks India to find quality companies trading below their intrinsic value. These stocks offer strong potential for long-term gains if their fundamentals remain sound. The most undervalued stocks India are typically identified using metrics like low P/E ratios, high dividend yields, and strong cash flows. In today’s market, sectors like banking, energy, and infrastructure often dominate the list of value picks. Knowing the top 10 undervalued stocks in India can help investors build a high-upside, risk-adjusted portfolio.
What are Undervalued Stocks?
Priced Lower Than Their True Worth: Undervalued stocks trade below their intrinsic value — meaning the stock is cheaper than what the company's fundamentals suggest it's worth. Many investors look for such undervalued stocks India to tap into hidden value.
Strong Financials, Weak Price: These stocks often belong to companies with solid earnings, assets, or growth potential, but their prices are held down by temporary market factors. This is common among the most undervalued stocks India, especially in sectors like banking and energy.
Identified Using Valuation Ratios: Investors use tools like P/E ratio, P/B ratio, and discounted cash flow analysis to spot undervalued opportunities. These methods are key to finding the top 10 undervalued stocks in India.
Potential for High Returns: As the market corrects itself, the price of undervalued stocks may rise, offering investors significant long-term gains which is why undervalued stocks India remain a core part of value investing strategies.
Top 10 Undervalued Stocks in India for 2025
Here are the top 10 undervalued stocks in India for 2025:
| Company Name | Industry | CMP | Market Cap | P/E | 52 Week High | 52 Week Low |
|---|---|---|---|---|---|---|
| Oil & Natural Gas Corpn Ltd | Crude Oil & Natural Gas | ₹238.10 | ₹299536.45 | 8.63 | ₹301.70 | ₹205.00 |
| Bank of Baroda | Banks | ₹248.40 | ₹128456.64 | 6.53 | ₹266.80 | ₹190.70 |
| Union Bank of India | Banks | ₹134.05 | ₹102328.48 | 5.55 | ₹158.60 | ₹100.75 |
| IndusInd Bank Ltd | Banks | ₹712.85 | ₹55536.43 | 47.27 | ₹1481.00 | ₹605.40 |
| Steel Authority of India Ltd | Steel | ₹131.05 | ₹54130.53 | 19.1 | ₹144.20 | ₹99.20 |
| Bank of India | Banks | ₹116.25 | ₹52924.76 | 5.42 | ₹130.35 | ₹90.00 |
| Embassy Office Parks REIT | Real Estate Investment Trusts | ₹409.75 | ₹38839.95 | 61.25 | ₹419.95 | ₹342.55 |
| Central Bank of India | Banks | ₹36.20 | ₹32766.07 | 8.04 | ₹61.89 | ₹32.81 |
| LIC Housing Finance Ltd | Finance | ₹565.15 | ₹31086.81 | 5.66 | ₹671.00 | ₹483.50 |
| National Highways Infra Trust | Infrastructure Investment Trusts | ₹142.00 | ₹27503.28 | 12.56 | ₹142.00 | ₹128.85 |
Disclaimer: The information provided on the above stocks is for informational purposes only. It is crucial to conduct thorough research before making any investment decisions regarding these stocks. We do not recommend trading any stocks without comprehensive research and professional financial advice. Always consult with a certified financial advisor to ensure informed and appropriate investment choices.
Table of Contents
Overview of Undervalued Stocks in India for 2025
Oil and Natural Gas Corporation
ONGC is India's largest oil and gas exploration and production company, primarily engaged in petroleum exploration and production activities. It plays a crucial role in meeting India's energy needs and contributes significantly to the country’s economy. The company is state-owned and headquartered in New Delhi. ONGC also explores and produces oil and gas internationally.
Coal India Ltd
Coal India Limited is the world's largest coal mining company and a state-owned enterprise under the Ministry of Coal, Government of India. It produces around 80% of India’s coal requirements, supplying to power plants, steel, cement, and other industries. Established in 1975, it operates through subsidiaries across India. Coal India is a key player in India’s energy sector and a major employer.
Varun Beverages Ltd
Varun Beverages Ltd is one of the largest bottlers of PepsiCo beverages in India and other international markets. The company produces and distributes popular soft drinks, juices, and packaged drinking water. It has a widespread bottling network across multiple states in India. Varun Beverages is known for its robust distribution and supply chain capabilities.
ABB India Ltd
ABB India Ltd is a leading engineering company providing electrification, automation, and digital solutions. It is part of ABB Group, a global technology leader in power and automation products. ABB India serves various sectors including utilities, industry, transportation, and infrastructure. The company focuses on innovation, sustainability, and enhancing industrial productivity.
Aditya Birla Capital
Aditya Birla Capital is the financial services arm of the Aditya Birla Group, offering a broad range of financial products including insurance, asset management, lending, and advisory services. It aims to provide comprehensive wealth management and financial solutions to individuals and businesses. The company operates across India with a strong focus on customer-centric services. It leverages technology to enhance financial inclusion.
Bank of India
Bank of India is a leading public sector bank established in 1906 and headquartered in Mumbai. It offers a wide range of banking products and services including retail banking, corporate banking, and international banking. The bank has an extensive branch network across India and abroad. It focuses on inclusive growth and financial empowerment.
Bank of Baroda
Bank of Baroda is one of India's oldest and largest public sector banks, founded in 1908. It provides diverse financial services including personal banking, corporate banking, and international banking. With a wide domestic and global presence, it plays a key role in supporting India's economic development. The bank is known for its technology-driven initiatives.
Punjab National Bank
Punjab National Bank (PNB) is a major public sector bank in India, founded in 1894. It offers a comprehensive suite of banking services ranging from retail to corporate banking and digital banking solutions. The bank has a vast network of branches and ATMs across India and overseas. PNB emphasizes financial inclusion and customer service excellence.
Union Bank of India
Union Bank of India is a prominent public sector bank, established in 1919 and headquartered in Mumbai. It provides various banking products including retail, corporate, and international banking services. The bank has a widespread presence with a focus on digital innovation and financial inclusion. It plays a vital role in supporting India's banking infrastructure.
Canara Bank
Canara Bank is one of India’s largest public sector banks, founded in 1906 and headquartered in Bengaluru. It offers a broad spectrum of banking products and services catering to retail, corporate, and agricultural sectors. The bank has a strong pan-India presence with an emphasis on technology-driven banking solutions. Canara Bank is committed to inclusive growth and financial literacy.
Why Invest in Undervalued Stocks in India?
High Growth Potential: Undervalued stocks India are priced below their true worth, giving investors room for strong capital appreciation when the market corrects.
Margin of Safety: Buying stocks below intrinsic value reduces downside risk, which is a key principle of value investing.
Long-Term Wealth Creation: Many of the most undervalued stocks India belong to companies with strong fundamentals and consistent earnings growth.
Hidden Opportunities: Sectors like PSU banks, infrastructure, and energy often feature in the top 10 undervalued stocks in India, offering untapped potential.
Favorable Risk-Reward Ratio: These stocks often provide better returns over time with relatively lower entry prices.
How to Identify Undervalued Stocks in India?
Use Valuation Ratios: Analyze stocks using P/E, P/B, EV/EBITDA, and dividend yield to spot undervaluation.
Check Intrinsic Value: Compare the stock's market price with its intrinsic value using DCF or earnings models — a common approach to find undervalued stocks India.
Study Fundamentals: Focus on companies with strong balance sheets, high ROE, and low debt.
Look for Sector Trends: Some of the most undervalued stocks India lie in sectors temporarily out of favor but fundamentally strong.
Use Stock Screeners: Tools like Value Research, Screener.in, and Tickertape help identify the top 10 undervalued stocks in India.
Risks of Investing in Undervalued Stocks
Value Traps: Some undervalued stocks remain cheap due to poor fundamentals or long-term issues, not just market mispricing.
Delayed Returns: Even good undervalued stocks India may take time to reflect their true value in market price.
Sector Risks: Many of the most undervalued stocks India are concentrated in sectors like PSU banks or commodities, which can be volatile.
Market Sentiment: Negative sentiment can suppress stock prices longer than expected, even if the fundamentals are strong.
Misjudged Valuation: Incorrect estimation of intrinsic value can lead to poor investment decisions — especially when picking from the top 10 undervalued stocks in India without due diligence.
How to Buy Undervalued Stocks in India?
Open a Demat and Trading Account: You need an account with a SEBI-registered broker to invest in undervalued stocks India.
Use Research Platforms: Tools like Screener.in, Moneycontrol, or SimplyWall.St can help find the most undervalued stocks India.
Create a Watchlist: Track the top 10 undervalued stocks in India and monitor price movements and earnings reports.
Start Small and Diversify: Avoid putting all your money into one stock; diversify across sectors and risk levels.
Review Regularly: Reassess your holdings based on performance, news, and updated financials to stay aligned with your investment goals.
Reasons Why Stocks Become Undervalued
Here are the reasons why stocks become undervalued:
Market Volatility
Significant drops in the overall market can result in the price drop of stocks. For example, when investors reevaluate their positions during a market correction, mid-cap, and small-cap companies can see substantial drops.
Performance Discrepancies
A company's stock price can suffer if the actual performance falls short of market or analyst expectations. Earnings reports or financial results that do not meet expectations are often viewed negatively by investors.
Economic Cycles
Some industries experience declining performance during certain quarters or periods. Stocks associated with these industries can see price declines although they have strong long-term prospects.
Negative News
Negative economic, political, or social news can hurt stock prices. Hindenburg Research said Adani's stock prices fell significantly after publishing a critical report.
How to Invest in Undervalued Stocks in India?
You can invest in Undervalued Stocks in various ways and here are some of the strategies:
Direct Stock Picking
By direct stock picking you can start investing in undervalued stocks. Under this strategy, you can conduct thorough research and select companies trading below its intrinsic value. You need to carefully analyse the financial statements, and valuation metrics, and understand the company’s business model and market position.
Mutual Funds
You can invest in mutual funds that focus on value investing. To create a diverse portfolio of undervalued stocks, they combine the capital of multiple investors.
Exchange Traded Funds (ETFs)
It is convenient to invest in an ETF that focuses on undervalued stocks. As with individual stocks, these funds track specific indices and offer diversification, lower costs, and ease of trading.
Conclusion
To sum up, investing in the best-undervalued stocks in India can be a wise decision for investors looking for long-term wealth creation. Investors can buy these shares at prices lower than their true value, leading to significant gains when the market corrects its inefficiencies. Investors can build a robust and diversified portfolio by carefully selecting undervalued stocks or investing in mutual funds and ETFs that focus on value investing. It is even easier to simplify this process by using a reliable stock market app, which provides real-time information, analysis tools, and alerts for potential investment opportunities.
