3 Undervalued IT Hardware Stocks Trading Below Fair Value
- August 27, 2026
- Posted by: Kunal Singla
- Category: Market
IT hardware sector PE near 22.8-58.0. Redington India trades at 18.4x. Rashi Peripherals at 16.0x. Dixon Technologies at 43.3x.
Quick Answer
Three IT hardware stocks, Redington India, Rashi Peripherals and Dixon Technologies, are trading below their respective sector average price to earnings ratios while all three post positive return on equity. Dixon Technologies stands out with the highest return on equity of the group as a contract electronics manufacturer, while Redington India and Rashi Peripherals are established IT product distributors. This gap between valuation and profitability is why these IT hardware stocks stand out on a simple sector screen, though a formal buy rating needs deeper company specific research.
India’s IT hardware industry spans electronics distribution and contract manufacturing, with the latter benefiting from production linked incentive schemes aimed at reducing import dependence. Not every stock in the space trades at the same multiple. A screen of listed IT hardware stocks against their sector average price to earnings ratios surfaces three names still priced below that benchmark.
Redington India, Rashi Peripherals and Dixon Technologies all currently trade below their respective industry PE benchmarks, 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 IT hardware distributors and manufacturers.
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Why These IT Hardware Stocks Screen as Undervalued
The IT hardware industry currently carries average price to earnings ratios ranging from close to 23 times for distribution focused businesses to close to 58 times for larger technology distribution peers, and over 50 times for contract electronics manufacturers. A stock trading meaningfully below its own peer group 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, with Redington India standing out for the widest gap to its own peer group average among these IT hardware stocks, despite operating in the lower margin distribution business.
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) |
|---|---|---|---|---|---|---|
| Redington India | REDINGTON | 358.55 | 18.40 | 58.00 | 14.67% | 27,687 |
| Rashi Peripherals | RPTECH | 782.25 | 16.02 | 22.75 | 13.71% | 5,208 |
| Dixon Technologies | DIXON | 14,700.00 | 43.26 | 50.77 | 30.76% | 90,063 |
Redington India: Widest Discount, Large Distribution Scale
Redington India distributes IT products, mobile devices and technology solutions across India, the Middle East and Africa. The stock trades at a price to earnings ratio of 18.40, well below its own peer group average of 58.00, at a current price of around Rs 359.
Return on equity of 14.67 percent is supported by a debt to equity ratio of 0.28. On an EPS of Rs 19.25 and book value of Rs 129.97, the price to book multiple works out to 2.72, alongside a dividend yield of 1.69 percent.
Rashi Peripherals: Lowest PE, Similar ROE
Rashi Peripherals distributes IT hardware, components and peripherals through a network of channel partners across India. Its price to earnings ratio of 16.02 is the lowest of the three IT hardware stocks in this list, against a sector average of 22.75, at a current share price of around Rs 782.
Return on equity of 13.71 percent is broadly comparable to Redington India, though the debt to equity ratio of 0.49 is higher. On an EPS of Rs 48.97 and book value of Rs 304.98, the price to book multiple works out to 2.57.
Dixon Technologies: Highest ROE, Contract Manufacturing
Dixon Technologies is a contract electronics manufacturer producing mobiles, consumer electronics and appliances for other brands under India’s production linked incentive scheme. The stock trades at 43.26 times trailing earnings, below its sector average of 50.77, at a current price of around Rs 14,700.
Return on equity of 30.76 percent is the highest of the three IT hardware stocks by a wide margin, and the debt to equity ratio of 0.21 remains low. On an EPS of Rs 340.53 and book value of Rs 764.90, the price to book multiple works out to 19.26, the richest among these three names.
Valuation Snapshot: PE, PB and Dividend Yield
Beyond the headline price to earnings ratio, book value multiples and dividend yield round out the valuation picture for these three companies. Dixon Technologies trades at a far richer price to book multiple, reflecting its manufacturing margins and much higher return on equity relative to the two distributors.
| Company | Price to Book | Book Value (Rs) | Dividend Yield | Debt to Equity |
|---|---|---|---|---|
| Redington India | 2.72 | 129.97 | 1.69% | 0.28 |
| Rashi Peripherals | 2.57 | 304.98 | 0.25% | 0.49 |
| Dixon Technologies | 19.26 | 764.90 | 0.07% | 0.21 |
Redington India pays the highest dividend yield of the three, typical of a mature, lower margin distribution business, while Dixon Technologies retains nearly all its earnings to fund manufacturing capacity expansion.
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Risks to Consider Before Buying These IT Hardware Stocks
A discount to the sector average price to earnings ratio does not remove company specific risk for IT hardware stocks exposed to thin margins and policy dependence.
Thin Margin Distribution Risk
Redington India and Rashi Peripherals operate in a low margin distribution business where earnings are sensitive to volume growth, working capital cycles and vendor relationships.
PLI Scheme and Policy Dependence for Dixon Technologies
A meaningful part of Dixon Technologies’ profitability is tied to production linked incentive benefits, and any change in scheme terms or eligibility could affect future earnings.
Currency and Component Cost Volatility
Imported components and foreign currency denominated purchases expose these companies to exchange rate movements and global semiconductor supply conditions.
Customer Concentration in Contract Manufacturing
Contract manufacturers like Dixon Technologies depend on a limited set of large brand customers, making revenue sensitive to shifts in client sourcing strategies.
How to Track These IT Hardware Stocks
Investors evaluating these three names should track quarterly volume growth, PLI scheme linked incentives, and how each sector average PE moves relative to each company’s own multiple over time, rather than relying on the valuation gap in isolation among IT hardware 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
Redington India, Rashi Peripherals and Dixon Technologies are the three IT hardware stocks currently trading below their respective sector average price to earnings ratios, 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 electronics distribution and contract manufacturing theme, though thin margin distribution risk and PLI scheme dependence 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 IT Hardware Stocks
Which IT hardware stocks are trading below their sector average PE?
Ans. Redington India, Rashi Peripherals and Dixon Technologies are currently trading below their respective sector average price to earnings ratios, based on live NSE and BSE pricing.
Is Redington India undervalued compared to its sector?
Ans. Redington India trades at a price to earnings ratio of 18.40, well below its own peer group average of 58.00, while delivering a return on equity of 14.67 percent.
Which of these IT hardware stocks has the highest return on equity?
Ans. Dixon Technologies has by far the highest return on equity of the three at 30.76 percent, reflecting its contract manufacturing margins compared with the distribution businesses of Redington India and Rashi Peripherals.
What is the market capitalisation of Rashi Peripherals?
Ans. Rashi Peripherals has a market capitalisation of around Rs 5,208 crore, with a price to earnings ratio of 16.02 against its sector average of 22.75.
Why does Dixon Technologies trade at a much higher price to book multiple?
Ans. Dixon Technologies trades at a price to book multiple of 19.26, far higher than Redington India and Rashi Peripherals, reflecting its much higher return on equity of 30.76 percent as a contract electronics manufacturer.
What are the main risks in undervalued IT hardware stocks?
Ans. The main risks include thin margins in distribution businesses, dependence on production linked incentive scheme terms for manufacturers, currency and component cost volatility, and customer concentration in contract manufacturing.
Is a low PE enough reason to buy an IT hardware stock?
Ans. A price to earnings ratio below the sector average is a useful starting screen for IT hardware stocks but not a standalone buy signal. Investors should also review margin trends, working capital cycles and policy dependence before investing.
