November 6, 2024
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Stock Market

Fundamentally strong stocks trading at discount of upto 16% to keep on your radar

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Stock Market

Fundamentally strong stocks trading at discount of upto 16% to keep on your radar

After the recent correction in the Indian stock market, identifying fundamentally strong large-cap stocks that are trading at a discount presents an enticing opportunity for savvy investors. These established companies often boast solid financial health, consistent revenue growth, and robust management teams, yet may be undervalued due to market fluctuations or temporary setbacks.

As a smart investor, one needs to capture these opportunities in order to optimize their portfolios, focusing on these discounted large-cap stocks can offer the potential for significant returns over a longer horizon. By capitalizing on market inefficiencies, investors can strategically position themselves to benefit from the eventual market correction that recognizes the true value of these resilient companies.

1. Bajaj Finance Ltd

Bajaj Finance has established itself as India’s premier non-banking financial company, offering diverse financial products from consumer loans to digital wallets. The stock is currently trading at Rs.6,836 down 16% from its all-time high of Rs. 8,168 on 4th November 2024, with a substantial market cap of Rs.423,146 crores, the company commands a P/E of 27.61. A strong promoter holding of 54.70%, with zero shares pledged, reflecting the management’s confidence.

The company’s robust 5-year performance shows CAGR sales growth of 24.35% and CAGR profit growth of 29.35%. Even after such impressive sales and profit growth, the stock has only given a return of 65% return over five years. This consistent growth trajectory, coupled with its digital transformation initiatives, positions Bajaj Finance as a leader in India’s financial services sector.

2. Adani Ports

Adani Ports, trading at Rs.1,350 down 15% from an all-time high of Rs. 1,588 with a market cap of Rs.291,618 crores, operates as India’s largest private port operator, handling diverse cargo from containers to crude oil across its 13 domestic ports with a P/E of 28.44. The company has a strong promoter holding of 65.89%, and notably 0% pledged shares. Additionally, the company has demonstrated resilience with a 19.58% CAGR sales growth over 5 years, while the profit has grown at a pace of 17% CAGR.

Although the stock has given close to a 250% return in the last 5 years, even then the company’s strategic port locations, expanding logistics network, and recent acquisitions of ports in Israel and Sri Lanka underscore its market dominance and ambitious international expansion plans, this highlights the future growth potential of the company.

3. ICICI Bank

ICICI Bank stands as one of the strongest banks in the country while the stock trades at Rs.1,270.35, 5% down from an all-time high even after giving close to 160% in 5 years. Boasting a market cap of Rs.895,426 crores and a P/E of 18.91. With 32.82% promoter holding and zero pledged shares. The bank has shown remarkable 5-year metrics with a CAGR of 17.25% sales growth and an impressive 59.73% profit growth.

The bank’s digital transformation and robust retail focus in the last 5 years have pushed it to the helm of the race. With industry-leading asset quality metrics ICICI Bank has established itself as a banking powerhouse. Its innovative iMobile app, strong CASA ratio, and expanding rural presence demonstrate its commitment to comprehensive banking solutions.