Large-Cap Stocks: During the market volatility, large cap stocks trading below their industry PE (Price-to-Earnings) ratio present excellent opportunities for value investors. These undervalued leaders, based on strong fundamentals and impressive business models, have the potential to offer over 20% returns in the future. Let’s take a look at 4 promising undervalued stocks.
Tata Motors Limited: Leading the EV Market
Company Overview: Established in 1945, Tata Motors Limited is India’s largest automobile manufacturer and a significant player globally under the Tata Group. The company offers a wide range of passenger cars, trucks, and electric vehicles (EVs).
Key Points:
- Innovation: Acquiring brands like Jaguar Land Rover and Tata Daewoo has strengthened its position in the luxury and commercial segments.
- EV Leadership: The expanding portfolio in the electric vehicle segment is meeting the global demand for sustainable transportation.
- Strong Profitability: With the improved performance of JLR and a robust domestic auto market, the company aims to be net debt-free by FY25.
ICICI Direct has given Tata Motors a “BUY” rating with a target price of ₹1,000, showing a 29.15% upside from the current share price of ₹781.
- Market Cap: ₹2,87,835 crore
- P/E Ratio: 8.57
State Bank of India (SBI): Pillar of Banking Sector
Company Overview: Established in 1955 and headquartered in Mumbai, State Bank of India (SBI) is India’s largest public sector bank. It offers a wide range of services in banking, insurance, and investments.
Key Points:
- Domestic and Global Presence: SBI has an extensive branch and ATM network in India and a significant international presence.
- Stable Growth: The bank’s performance is continuously improving due to better asset quality and strong credit growth.
ICICI Direct has given SBI a BUY rating with a target price of ₹1,040, showing a 23% upside from the current share price of ₹802.40.
- Market Cap: ₹7,16,111 crore
- P/E Ratio: 9.97
Oil and Natural Gas Corporation (ONGC): Leader in the Energy Sector
Company Overview: Established in 1956, ONGC is India’s largest oil and gas production company, playing a crucial role in the exploration and production of crude oil and natural gas.
Key Points:
- Re-Investment: New projects like KG 98/2 and stranded gas monetization are expected to drive 11% production volume growth.
- Cost-Effective Operations: The company’s future earnings are likely to strengthen due to cost-effective operations.
Motilal Oswal has given ONGC a “BUY” rating with a target price of ₹330, showing a 29% upside from the current share price of ₹248.05.
- Market Cap: ₹3,12,053 crore
- P/E Ratio: 7.70
Larsen & Toubro Limited (L&T): Master of Infrastructure
Company Overview: Established in 1938, Larsen & Toubro Limited (L&T) is a leading multinational company in engineering, construction, and technology.
Key Points:
- Strong Order Book: Annual growth of 13% and a revenue CAGR of 14.7% expected for FY24-26.
- Global Reach: Effective presence in several international markets, including Asia, Africa, and Europe.
Motilal Oswal has given L&T a “BUY” rating with a target price of ₹4,262, showing a 21.4% upside from the current share price of ₹3,511.
- Market Cap: ₹4,82,788 crore
- P/E Ratio: 30.16
Penny Stock: Promoters Buy 4.8 Crores Shares, Big Profits Expected from Q4 FY25
Conclusion
| Stock | Market Cap(₹) | PE | Current Price | Target Price (₹) | Upside % | Recommended By |
| Tata Motors | 2,87,835 crore | 8.57 | 781 | 1000 | 29.15% | ICICI Direct |
| SBI | 7,16,111 crore | 9.97 | 802 | 1,040 | 23 | ICICI Direct |
| ONGC | 3,12,053 crore | 7.7 | 248 | 330 | 29 | Motilal Oswal |
| L&T | 4,82,788 crore | 30.16 | 3,511 | 4,262 | 21.4% | Motilal Oswal |
Also Read: Tata Group Stock Upside, Partners with Suzuki for EV Development in 2024
These four strong companies Tata Motors, SBI, ONGC, and L&T offer great investment opportunities at current prices due to their P/E ratios below the industry average and strong growth potential. From a long-term perspective, these stocks can provide better returns for value investors.