Tamilnad Mercantile Bank and Can Fin Homes continue to benefit from healthy asset quality, expanding loan books, and rising demand for retail and housing finance.
ICICI Securities, Motilal Oswal, and Angel One are well-positioned to gain from increasing retail investor participation and India's growing financialization.
Godawari Power & Ispat and GMDC could benefit from India's infrastructure push and industrial expansion, supported by strong operational fundamentals.
Undervalued stocks are stocks with market prices below their intrinsic value, meaning their market price does not accurately reflect their true worth. These may be good investments for long-term investors as they have strong fundamentals and prospects for continued dividend growth. Banking, financial services, infrastructure and capital markets are poised to continue to generate wealth over the long term as India's economy is expected to expand at above 6% in FY27.
Market Capitalization: Rs. 14,179 crore
Tamilnad Mercantile Bank trades at Rs. 894, has maintained good asset quality and steady profitability in the build-up of its retail loan book. It has an attractive regional banking play with decent long-term growth prospects given its conservative approach to lending and enhancement of its digital banking capabilities.
Incorporated in 1921, Tamilnad Mercantile Bank (TMB) is one of the oldest private sector banks in India. It offers an array of banking and financial services to retail customers, micro, small, and medium enterprises.
Market Capitalization: Rs. 20,501.30 crore
Godawari Power and Ispat remains a beneficiaries of India's infrastructure and manufacturing growth. The company has been able to sustain healthy margins over commodity price fluctuations, thanks to its integrated steel business, captive power generation and sound balance sheet.
Market Capitalization: Rs. 10,861 crore
Can Fin Homes Ltd., which trades at Rs. 816, is a deposit-taking housing finance company (HFC) registered with the National Housing Bank (NHB). Canara Bank holds a 29.99% stake in the company. It primarily provides relatively smaller-ticket housing loans to salaried & professional and self-employed non-professional (SENP) borrowers. Its long-term prospects have remained solid with stable asset quality and steady growth in loans.
Market Capitalization: Rs. 29,149 crore
ICICI Securities Limited, trading at Rs. 896, is engaged in the business of broking (institutional and retail), distribution of financial products, merchant banking and advisory services. India's retail investor participation and growing activity in the equity market continue to drive brokerage businesses.
Market Capitalization: Rs. 52,429 crore
Motilal Oswal Financial Services Ltd., founded in 1987, is a well-diversified financial services firm. The company has a network spread across 550+ cities and towns comprising 2,500+ Business Locations operated by its Business Partners and 1,600,000+ customers. The stock currently trades at Rs. 869.
The company has been able to generate various revenue streams given its diversified financial services model and leveraging the rising financialization in India.
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Market Capitalization: Rs. 22,686.10 crore
GMDC continues to be a major player in the Indian mining industry, being exposed to a variety of minerals including lignite, bauxite, manganese and others. The company has strong long-term growth prospects as a result of government infrastructure spending and continued growth in industrial demand.
Market Capitalization: Rs. 27,785 crore
Angel One Ltd is a diversified financial services company and is primarily engaged in the business of stock, commodity and currency broking, institutional broking, providing margin trading facility, depository services and distribution of mutual funds, lending as an NBFC and corporate agents of insurance companies.
These stocks may be undervalued given prevailing market conditions, but investors should do their own research, evaluate the stocks' valuation, earnings quality, and risks before investing. The best way to deal with market volatility is through a diversified, long-term investment approach.
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