5 Undervalued Stocks in India 2026: BPCL PE 5.2x, Coal India PE 8.64x, Vedanta PE 4.26x, Infosys PE 14.34x, Hindustan Zinc PE 15.82x

Undervalued stocks in India are those trading at a significant discount to their intrinsic value relative to peers, industry benchmarks, or their own historical valuation multiples. The key criteria for identifying undervalued stocks in India are low price-to-earnings (PE) ratio relative to the sector, high return on capital employed (ROCE), strong free cash flow, and a durable business model that the market has temporarily mispriced. These five undervalued stocks in India are screened from data filtering for large-cap stocks with PE below industry average and ROCE above 20%. Kunal Singla, Associate Director at Univest analyses each in depth.

Click Here – Get Free Investment Predictions on Univest

Undervalued Stocks in India: Key Valuation Metrics

Company	Symbol	PE Ratio	ROCE (TTM)	LTP	Market Cap (Cr)
BPCL	BPCL	5.2x	24.02%	Rs 309.75	Rs 1,36,967
Vedanta	VEDL	4.26x	25.21%	Rs 273.45	Rs 1,10,429
Coal India	COALINDIA	8.64x	29.67%	Rs 435.40	Rs 2,68,325
Infosys	INFY	14.34x	38.60%	Rs 1,041.20	Rs 4,28,663
Hindustan Zinc	HINDZINC	15.82x	59.74%	Rs 518.05	Rs 2,18,914

1. BPCL , PE 5.2x With ROCE 24%: The Oil Marketing Value Play

Bharat Petroleum Corporation (NSE: BPCL, LTP: Rs 309.75) is among the most undervalued stocks in India at a PE of just 5.2x while generating a ROCE of 24.02%. BPCL is India’s second-largest oil marketing company (OMC) , operating refineries with approximately 38.3 MT/year capacity, a nationwide retail fuel network of approximately 22,000+ outlets, and expanding LPG and petrochemicals businesses. The undervalued stocks case for BPCL is straightforward: with Brent crude collapsing to approximately $74 from wartime highs of $120, BPCL’s refining margins are improving dramatically while fuel retailing marketing margins are at comfortable levels. At PE 5.2x and dividend yield historically in the 5-7% range, BPCL offers a combination of value, yield, and cyclical recovery that few undervalued stocks in India can match. Key risk: government-mandated pricing of petrol, diesel, and LPG can periodically compress marketing margins.

2. Vedanta , PE 4.26x and ROCE 25.21%: Commodity Diversified at Deep Discount

Vedanta (NSE: VEDL, LTP: Rs 273.45) is trading at one of the lowest PE multiples among undervalued stocks in India at 4.26x, despite generating a strong ROCE of 25.21%. Vedanta is India’s largest diversified natural resources company with businesses in zinc (Hindustan Zinc , 65% subsidiary), aluminium, iron ore, copper, oil and gas, and steel. The holding company structure creates a valuation discount (the “holdco discount”) as markets apply a conglomerate penalty. Additionally, Vedanta’s high debt at the parent level and the Anil Agarwal family’s governance track record have historically been concerns for institutional investors. However, at 4.26x PE with improving commodity prices and de-leveraging plans underway, Vedanta is arguably one of the cheapest undervalued stocks in India relative to asset quality.

3. Coal India , PE 8.64x, ROCE 29.67%, and 6%+ Dividend Yield

Coal India (NSE: COALINDIA, LTP: Rs 435.40) is a classic undervalued stocks in India candidate: PE of 8.64x, ROCE of 29.67%, near-zero debt, and a consistent dividend yield of approximately 6-7% annually. Coal India is the world’s largest coal mining company , mining approximately 700-800 million tonnes annually , and holds near-monopoly status in India’s coal supply. India’s thermal power capacity continues to expand (coal remains 50%+ of power generation) as the transition to 100% renewables will take decades. The market assigns a low PE to Coal India because of ESG concerns (coal is a sunset fuel globally), government ownership risks, and wage settlement overhang. For undervalued stocks investors with a 3-5 year horizon, Coal India offers one of India’s best dividend-adjusted returns with minimal valuation risk.

4. Infosys , PE 14.34x With ROCE 38.60%: IT Giant at Cyclical Low Valuation

Infosys (NSE: INFY, LTP: Rs 1,041.20) is perhaps the highest-quality undervalued stocks in India story at a PE of 14.34x. India’s second-largest IT services company has historically traded at 18-25x PE on the strength of consistent revenue growth, high free cash flow (FCF yield approximately 5-6%), and capital returns through buybacks and dividends. The current 14.34x PE reflects investor concerns about global IT spending slowdown in the face of rising AI automation. However, Infosys is actively building AI-powered services and has one of the strongest AI practices among Indian IT majors. With ROCE of 38.60%, consistent 10-12% EPS growth guidance, and a net cash balance sheet, Infosys is among the most fundamentally defensible undervalued stocks in India.

5. Hindustan Zinc , PE 15.82x, ROCE 59.74%: The Highest ROCE Undervalued Stock

Hindustan Zinc (NSE: HINDZINC, LTP: Rs 518.05) has the highest ROCE among these undervalued stocks in India at 59.74% , exceptional for any Indian company , combined with a PE of 15.82x. India’s largest zinc-lead-silver producer and the world’s third-largest integrated zinc producer, Hindustan Zinc operates the Rampura Agucha mine (one of the world’s largest zinc deposits) and has consistent silver by-product revenue. With Vedanta as the majority promoter and the Government of India as 29.54% stakeholder, Hindustan Zinc generates extraordinary cash flows. Metal commodity pricing (zinc, lead, silver) drives earnings, and the current metal market presents a mixed picture. But at 15.82x PE with 59% ROCE and strong dividend payments, Hindustan Zinc stands out as undervalued stocks relative to the quality of its asset base.

Screen All Undervalued Stocks in India on Univest Screener

The concept of undervalued stocks in India requires both quantitative screening and qualitative judgment. Not all undervalued stocks in India are worth buying; some are cheap for structural reasons (ESG concerns for Coal India, government pricing for BPCL). The best undervalued stocks in India combine low PE with high ROCE and a credible catalyst for re-rating toward fair value.

Conclusion: Undervalued Stocks in India

These five undervalued stocks in India , BPCL (PE 5.2x), Vedanta (PE 4.26x), Coal India (PE 8.64x), Infosys (PE 14.34x), Hindustan Zinc (PE 15.82x) , all combine low PE with high ROCE, making them the strongest value propositions in India’s large-cap universe based on data. Screen undervalued stocks in India live on Univest. Consult a SEBI-registered financial advisor before investing.

Download the Univest iOS App or Univest Android App to screen undervalued stocks in India and track valuation metrics live on Univest.

Frequently Asked Questions

What are undervalued stocks in India?

Ans. Undervalued stocks in India are stocks trading at a significant discount to their intrinsic value , typically characterised by a PE ratio well below the sector average, high Return on Capital Employed (ROCE), strong cash flows, and a durable business model. The five undervalued stocks in India identified here using data are BPCL (PE 5.2x, ROCE 24%), Vedanta (PE 4.26x, ROCE 25%), Coal India (PE 8.64x, ROCE 29.67%), Infosys (PE 14.34x, ROCE 38.60%), and Hindustan Zinc (PE 15.82x, ROCE 59.74%).

Is BPCL a good buy now?

Ans. BPCL (NSE: BPCL, LTP: Rs 309.75) at PE 5.2x with ROCE 24.02% is arguably among the cheapest undervalued stocks in India. With Brent crude falling to approximately $74 (pre-Iran war levels), BPCL’s refining margins and marketing margins are improving. However, BPCL as a PSU is subject to government fuel pricing decisions that can periodically compress profitability. The dividend yield of approximately 5-7% provides downside support. Consult a SEBI-registered financial advisor before investing.

Why is Infosys considered undervalued?

Ans. Infosys (INFY, LTP: Rs 1,041.20) is considered undervalued because its current PE of 14.34x is significantly below its historical trading range of 18-25x. The company generates ROCE of 38.60%, has a strong AI practice, consistently returns cash through buybacks and dividends, and guides for 10-12% EPS growth. The market has penalised IT stocks due to global AI disruption concerns, creating what many analysts see as an opportunity to buy high-quality undervalued stocks at a cyclical discount.

What makes Hindustan Zinc unique among undervalued stocks?

Ans. Hindustan Zinc (NSE: HINDZINC, LTP: Rs 518.05) stands out with the highest ROCE of 59.74% among these undervalued stocks , exceptional by any global standard. It operates the Rampura Agucha mine (one of the world’s largest zinc deposits) with very low costs, generating massive free cash flow. Zinc demand for infrastructure (galvanising steel), silver for industrial applications, and the strong asset base make it uniquely positioned. The 15.82x PE is low relative to quality.

How do I screen undervalued stocks in India?

Ans. Screen undervalued stocks in India using these criteria: (1) PE ratio below industry average; (2) ROCE above 15-20%; (3) Debt-to-Equity below 1; (4) Consistent revenue and profit growth over 5 years; (5) Free cash flow positive; (6) Strong management track record. Tools: Univest Screener, Screener.in, Groww Fundamental Screener, and Trendlyne. Filter by ‘PE below sector average’ and ‘ROCE above 20%’ to generate a list of undervalued stocks in India across market caps.

What is ROCE and why is it important for identifying undervalued stocks?

Ans. ROCE (Return on Capital Employed) measures how efficiently a company generates profits from all capital deployed (both equity and debt). Formula: EBIT / Capital Employed × 100. A company with low PE and high ROCE is typically an undervalued stocks candidate , it generates strong returns but is priced cheaply. Hindustan Zinc’s ROCE of 59.74% means for every Rs 100 deployed in the business, it generates Rs 59.74 in operating profit , exceptional capital efficiency that justifies a significant valuation premium over peers.

Is Vedanta a safe investment?

Ans. Vedanta (NSE: VEDL) at PE 4.26x appears deeply undervalued, but it carries specific risks: (1) high debt at the holding company (Vedanta Resources plc) level; (2) governance concerns around promoter (Anil Agarwal family) transactions; (3) commodity price cyclicality across zinc, aluminium, copper, and oil; (4) complex holding structure (Vedanta Ltd, Hindustan Zinc subsidiary, Cairn India operations). For investors with higher risk tolerance seeking cyclical commodity exposure at deep valuations, Vedanta can be considered. Consult a SEBI-registered financial advisor.

What is Coal India’s moat as an undervalued stock?

Ans. Coal India’s competitive moat as an undervalued stock comes from: (1) near-monopoly in India’s domestic coal supply (government-mandated captive use); (2) captive coal block allocations that competitors cannot replicate; (3) massive infrastructure (mines, rail sidings, washeries) built over decades; (4) government ownership backing (preventing predatory pricing or market exit); and (5) inelastic demand from India’s 200+ GW thermal power fleet that cannot switch fuels quickly. The 6-7% dividend yield provides a strong floor for the stock’s valuations.