Best Value Stocks in India 2023

If you are an avid trader, you might have certainly thought what are the best value stocks in India. But first, are you completely familiar with the terms value stocks and value investing ? Is it as good as it sounds ? Let’s find out today.

Value stocks are those shares that are trading at a discount. Such shares seem to trade at a lower price relative to their dividends, earnings, etc. This makes them sound appealing to investors.

Value Investing, a phrase coined by Benjamin Graham, is an investment approach where investors scour for stocks of companies trading in the market at a price that doesn’t agree with their intrinsic value. Simply put, it is an investment strategy concerned with choosing stocks that seem to be trading for less than their intrinsic or book value.

Value investing is primarily based on the belief that the stock market will determine the stock’s actual potential and will eventually grow in value while creating healthy returns.

Now that you are pretty much oriented with the basic meaning of value investing, let’s delve deeper to find out what are the best value stocks to buy now in India.

Top Value Stocks in India 2023

Factors to Consider Before Investing in Value Stocks

Investing in value stocks should always be made by considering the factors likely to affect its performance. Here, we have listed the prominent ones-

• Company History and Performance

The most basic factor to consider while picking up value stocks for your portfolio is analysing the company's history and regular performance.

Analyse its revenue, dividend payouts, industry standings, and how well it has performed over the years. If these factors fit your investment criteria, go ahead and add them to your portfolio.

• Financial Ratios

Financial ratios play a crucial role in analysing a stock’s performance. You can consider and compute the Price-to-sales ratio, Price-to-earnings ratio, Price-to-book ratio, etc., to explore how a company has been performing.

These ratios can shed some light on a company’s market standing and how well it can benefit your investments.

• Risk Involved

Though value stocks are comparatively less risky than growth stocks, estimating how risky they can get under certain circumstances is essential.

Estimate how much risk is affordable to your pocket, and then consider investing only if feasible.

• Cash Flow

Another factor to have a look at would be the free cash flow of a company.

Since it displays the net cash flow considering all expenses and capital, this factor can be helpful in understanding the stock’s stability and performance.

• Company Fundamentals

Your research for the best value stocks will remain incomplete if you do not consider the company fundamentals. Hence, make sure to run through them to get a clear picture.

Value stocks are likely to be affected by economic changes, thus, examining how they tackled challenging situations in the past can be a win-win deal for you before investing.

Overview of the Best Value Stocks in India

Here is a brief overview of some of the well-performing value stocks-

1) Accelya Solutions India Ltd

Founded in 1976, Accelya Solutions India Ltd. is a top global software provider to the airline industry. This value stock has been a preference for many investors over the years due to its solid performance in the industry.

With its technology products and services crafted for the travel and transport industry, the company has created a strong niche.

2) Tata Consultancy Services Ltd (TCS)

Tata Consultancy Services Ltd is a leader when it comes to IT services, business and digital solutions. With its presence of over 50+ years in the industry, TCS has been one of the top choices of investors.

Given its robust market status, revenue, performance, and consistency, this stock often carves its way into many investor’s portfolios.

3) CRISIL Ltd

CRISIL stands for Credit Rating Information Services of India Limited. It is a renowned company offering ratings, research, risk and policy advisory services. For over 35+ years, the company has been performing exceptionally and has been a favourite of stock market investors.

The company currently operates its business in India, US, UK, Australia, Japan, UAE and many more. Because of its renowned reputation across the globe, CRISIL Ltd is often considered a top value stock by investors.

4) Coal India Ltd

Coal India Ltd is a Public Sector Undertaking. It is primarily engaged in coal mining and refinery. It was established in November 1975 and has been one of the key players in enhancing the Indian economy.

Coal India Ltd has time and again proven its mettle with its stable performance, solid market position, and profitable returns for a decade of years. Given all such vital factors, the company has been a top pick for many traders.

5) Colgate-Palmolive (India) Ltd

Colgate-Palmolive (India) Ltd, a leading provider of scientifically proven oral care products and various consumer goods, is a globally renowned brand.

Since its onset, the company has built a strong reputation in the worldwide market. Over the years, it has had a track record of exceptional results while enhancing value for its shareholder base.

Summing Up

Value stocks have proven to offer great returns for many investors. But the catch here is you would have to be patient while being invested as these stocks’ performance gets easily affected due to various economic circumstances.

Hence, you must do your homework well before adding a value stock to your portfolio. Review all the factors likely to affect a stock, and only then make your choices.

Disclaimer: This blog is solely for educational purposes. The securities/investments quoted here are not recommendatory.

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Research Analyst - Aakash Baid