3 Undervalued Financial Services Stocks Trading Below Fair Value
- August 27, 2026
- Posted by: Kunal Singla
- Category: Market
Financial services sector PE near 35.3. Motilal Oswal trades at 31.6x. Angel One at 26.6x. Geojit at 30.1x. All post positive ROE.
Quick Answer
Three financial services stocks, Motilal Oswal Financial Services, Angel One and Geojit Financial Services, are trading below the sector’s average price to earnings ratio of close to 35.3 times while each posts positive return on equity. Angel One trades at the widest discount of the three and pays an unusually high dividend yield, while Motilal Oswal combines broking with asset management and wealth businesses. This gap between valuation and profitability is why these financial services stocks stand out on a simple sector screen, though a formal buy rating needs deeper company specific research.
India’s broking and wealth management industry has grown rapidly on the back of rising retail participation in equity markets, though trading volumes and revenue can swing sharply with market sentiment. Not every stock in the space carries the same multiple. A screen of listed financial services stocks against the sector’s average price to earnings ratio surfaces three names still priced below that benchmark.
Motilal Oswal Financial Services, Angel One and Geojit Financial Services all currently trade below the broader financial services industry PE, despite posting positive return on equity. This piece breaks down why each stock screens as undervalued, what the underlying financials show, and the risks that come with owning broking and wealth management companies.
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Why These Financial Services Stocks Screen as Undervalued
The financial services industry currently carries an average price to earnings ratio of close to 35.3 times trailing earnings for broking and wealth management companies in this classification. A stock trading meaningfully below that average, while still posting positive return on equity, is a reasonable starting point for a relative valuation screen.
All three companies below clear that bar, though Angel One stands out with a dividend yield well above the other two, a combination not always available among financial services stocks priced at a discount to the sector multiple.
The table below lists these three companies alongside their current price, valuation multiple and return ratios.
| Company | NSE Ticker | CMP (Rs) | PE Ratio | Sector PE | ROE | Market Cap (Rs Cr) |
|---|---|---|---|---|---|---|
| Motilal Oswal Financial Services | MOTILALOFS | 1,023.70 | 31.59 | 35.31 | 14.50% | 62,663 |
| Angel One | ANGELONE | 296.50 | 26.55 | 35.31 | 14.96% | 27,411 |
| Geojit Financial Services | GEOJITFSL | 80.05 | 30.08 | 35.31 | 6.69% | 2,250 |
Motilal Oswal: Diversified Financial Services Franchise
Motilal Oswal Financial Services operates across broking, asset management, wealth management and investment banking, giving it a more diversified revenue base than pure brokers. The stock trades at a price to earnings ratio of 31.59, below the sector average of 35.31, at a current price of around Rs 1,024.
Return on equity of 14.50 percent is broadly comparable to Angel One, and the debt to equity ratio of 1.65 reflects capital used in the group’s lending and market making businesses. On an EPS of Rs 32.93 and book value of Rs 213.97, the price to book multiple works out to 4.86, the richest of the three financial services stocks in this list.
Angel One: Widest Discount, Highest Dividend Yield
Angel One is a digital first retail broking platform with a large base of active trading and demat accounts. Its price to earnings ratio of 26.55 is the widest discount to the sector average of 35.31 among these three financial services stocks, at a current share price of around Rs 297.
Return on equity of 14.96 percent is the highest of the three names, and the company pays an unusually high dividend yield of 8.22 percent, reflecting its capital light broking model. On an EPS of Rs 11.30 and book value of Rs 66.96, the price to book multiple works out to 4.48.
Geojit Financial Services: Smallest Scale, Lowest ROE
Geojit Financial Services operates a retail broking and wealth advisory business with a strong presence in southern India and among non resident Indian investors. The stock trades at 30.08 times trailing earnings, below the sector average of 35.31, at a current price of around Rs 80.
Return on equity of 6.69 percent is the lowest of the three names, reflecting its smaller scale relative to Motilal Oswal and Angel One, though the debt to equity ratio of 0.10 is the lowest of the group. On an EPS of Rs 2.68 and book value of Rs 43.03, the price to book multiple works out to 1.87, the lowest among these financial services stocks.
Valuation Snapshot: PE, PB and Dividend Yield
Beyond the headline price to earnings ratio, book value multiples and dividend yield highlight meaningful differences between these three companies. Geojit trades at the lowest price to book multiple, reflecting its smaller scale and lower profitability relative to the other two.
| Company | Price to Book | Book Value (Rs) | Dividend Yield | Debt to Equity |
|---|---|---|---|---|
| Motilal Oswal Financial Services | 4.86 | 213.97 | 0.58% | 1.65 |
| Angel One | 4.48 | 66.96 | 8.22% | 1.30 |
| Geojit Financial Services | 1.87 | 43.03 | 1.86% | 0.10 |
Angel One’s dividend yield stands well above the other two financial services stocks, a function of its capital light broking model that requires less reinvestment than diversified franchises. Geojit carries the least leverage of the three, consistent with its smaller and simpler business.
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Risks to Consider Before Buying These Financial Services Stocks
A discount to the sector average price to earnings ratio does not remove company specific risk for financial services stocks highly sensitive to market activity.
Trading Volume Cyclicality
Broking revenue is closely tied to retail trading volumes, which can swing sharply with market sentiment, volatility and regulatory changes to derivatives trading.
Regulatory Changes to Derivatives and Brokerage
Changes in margin requirements, futures and options regulations, or brokerage fee structures can directly affect revenue for broking focused companies with little advance notice.
Competitive Pricing Pressure
Intense competition among discount and full service brokers has pushed brokerage rates lower over time, requiring companies to grow volumes or diversify revenue to sustain profitability.
Client Concentration and Market Cycle Risk
A prolonged bear market or period of low retail participation can meaningfully reduce new account additions and trading activity, directly affecting revenue across the sector.
How to Track These Financial Services Stocks
Investors evaluating these three names should track monthly active client additions, trading volume trends, and how the sector average PE moves relative to each company’s own multiple over time, rather than relying on the valuation gap in isolation among financial services stocks. Comparing these numbers regularly is the most reliable way to judge whether the discount to fair value remains intact or has already closed.
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Conclusion
Motilal Oswal Financial Services, Angel One and Geojit Financial Services are the three financial services stocks currently trading below the sector’s average price to earnings ratio of close to 35.3 times, while all three post positive return on equity. That combination makes them worth a closer look for investors who already want exposure to India’s retail broking and wealth management theme, though trading volume cyclicality and regulatory risk mean position sizing and diversification still matter when adding these names to a portfolio.
Disclaimer: Data and figures in this article are sourced from publicly available information. These may or may not be accurate. Please verify all data with the official NSE (nseindia.com) and BSE (bseindia.com) websites before making any investment decision. Investments in securities are subject to market risk. This content is for educational purposes only and is not investment advice by Univest (SEBI RA INH000013776).
FAQs on Undervalued Financial Services Stocks
Which financial services stocks are trading below the sector average PE?
Ans. Motilal Oswal Financial Services, Angel One and Geojit Financial Services are currently trading below the financial services sector’s average price to earnings ratio of close to 35.3 times, based on live NSE and BSE pricing.
Is Angel One undervalued compared to its sector?
Ans. Angel One trades at a price to earnings ratio of 26.55, the widest discount to the sector average of 35.31 among these three names, while delivering a return on equity of 14.96 percent and a dividend yield of 8.22 percent.
Why does Motilal Oswal carry higher leverage than Geojit?
Ans. Motilal Oswal Financial Services runs a debt to equity ratio of 1.65 because of capital deployed in its lending and market making businesses, unlike Geojit Financial Services, which operates a simpler broking model with a ratio of just 0.10.
What is the market capitalisation of Motilal Oswal Financial Services?
Ans. Motilal Oswal Financial Services has a market capitalisation of around Rs 62,663 crore, with a price to earnings ratio of 31.59 against the sector average of 35.31.
Why does Geojit Financial Services have a lower return on equity?
Ans. Geojit Financial Services’ return on equity of 6.69 percent reflects its smaller operating scale relative to Motilal Oswal and Angel One, even though its price to earnings ratio of 30.08 remains below the sector average.
What are the main risks in undervalued financial services stocks?
Ans. The main risks include cyclicality in retail trading volumes, regulatory changes to derivatives and brokerage rules, competitive pricing pressure among brokers, and reduced activity during prolonged bear markets.
Is a low PE enough reason to buy a broking stock?
Ans. A price to earnings ratio below the sector average is a useful starting screen for financial services stocks but not a standalone buy signal. Investors should also review client growth, revenue diversification and market cycle sensitivity before investing.
