5 Most Undervalued Stocks in India (2026)
When markets rise, some stocks can move ahead of their fundamentals, while others take longer to get noticed.This can create a gap between a company’s market value and what its earnings, assets and growth prospects may suggest. Undervaluation sometimes coincides with temporary financial underperformance, a business transition or near-term concerns that weigh on investor sentiment. As these factors play out, a gap can emerge between the stock’s current valuation and the business’s longer-term earnings potential. The key is to find out how the business is positioned for the next phase of growth. In this editorial, we look at five undervalued stocks. #1 Raymond LifestyleFirst on the list is Raymond Lifestyle, the flagship company of the Raymond Group. It offers fashion products and services with branded textile and apparel brands across formal, casual, and ethnic wear. As of June, 2026, the total store count stood at 1,627. Its flagship brand, The Raymond Shop (TRS), has a network of 1,109 stores across more than 600 cities and towns. At the current share price of Rs 680, Raymond trades at around 0.4 times its book value of Rs 1,582 per share. The company has also maintained a structurally debt-free balance sheet with a net cash surplus of Rs 1,540 million (m) as of June 2026. This can be attributed to the company’s weak financial condition in FY25, followed by a modest recovery in FY26.Total income surged 11% YoY to Rs 70.3 bn in FY26. Revenue growth was supported by branded textiles (+14%), branded apparel (14%), high-value cotton shirting (+2%), and garmenting (flat). EBITDA grew by 23% to Rs 8 bn, lifting the margin to 11.4%. Net profit grew 21% to Rs 1,750 m. The company also became net-debt-free with a net cash surplus of Rs 1.8 bn. Looking ahead, management aims to at least double company turnover within 3 to 5 years, with EBITDA projected to grow faster than revenue. Management states FY27 as a year of consolidation. It plans to optimize costs and restore sustainable profitability. Rather than aggressive expansion, it will focus on profit through a lean, high-performing store network. It targets a net addition of 30-40 stores in FY27. Further, it is shifting the product mix toward high-value Wool and Linen across all segments. This could support margins. It is also moving the product mix toward smart casuals, polos, chinos, and denim.At the same time, it is exiting the Sleepwear category to reallocate resources towards high-growth brands.Raymond is betting big on its ethnic wear brand, Ethnix, which currently operates 137 stores. The business is scaling. It aims to become a Rs 5+ bn brand over the medium term. The company is also expected to benefit from the India-UK and India-EU FTAs. The garmenting business was weak in FY26 due to US tariff-related uncertainty, but is witnessing a gradual recovery in orders. Now the outlook has improved a lot. As of Q1FY27, all five of its manufacturing plants have been 100% booked through December, with orders currently being taken for Q4 FY27 (January onwards). To support long-term demand, Raymond is adding about 1 m in annual production capacity. Raymond plans 5% to 7% apparel and 7% to 9% fabric price hikes from Q2FY27 to offset wool, cotton and flax inflation. Check out Raymond Lifestyle’s financial factsheet and quarterly results to know more. #2 NTPCSecond on the list is NTPC. NTPC operates a diversified fleet of thermal (coal and gas), hydro, and renewable energy (solar and wind) power stations. NTPC accounts for 17% of India’s total installed capacity, generating 24% of the nation’s power supply. As of 30 June, 2026, NTPC Group’s operational capacity stands at 90.9 GW. Total group portfolio capacity, including under-construction assets, reaches 126.6 GW. Financially, consolidated revenue grew 7.8% year on year to Rs 507.4 bn. Operating profit grew 29% to Rs 162.3 bn with margins at 32%. Net profit surged 12.9% to Rs 68.9 bn. The company trades at a PE of 11.3, below both its 5-year historical median of 13.2 and the industry PE of 21. The stock offers a 2.7% dividend yield and generates high free cash flow. Management has guided for a strong future. NTPC has raised its capacity targets to 150 GW by FY32 and 250 GW by FY37. The share of fossil fuel-based capacity in NTPC’s portfolio is projected to decline from 82% to 56% by FY32 and to 39% by FY37. Clean energy share could go up to nearly 33% of generation by FY37, up from 4% today.Operational Renewable Energy (RE) capacity stands at 12 GW. NTPC targets expanding its RE capacity to 60 GW by FY32 and 136 GW by FY37. Through NTPC Green Energy (NGEL), NTPC aims to add 7 GW to 8 GW of RE capacity in FY27. On the thermal fleet side, NTPC has 15.7 GW of coal-based capacity currently under construction. On the Nuclear Power side, through ASHVINI (a joint venture with NPCIL), NTPC is constructing the 2.8 GW (4×0.7 GW) PHWR Mahi Banswara Atomic Power Project in Rajasthan. NTPC formed NTPC Parmanu Urja Nigam to build and operate nuclear plants, targeting 30 GW of nuclear capacity by FY47 toward India’s 100 GW national nuclear goal. NTPC expects a 2-year capex of Rs 1 tn for FY27 and envisages a total long-term capital deployment of Rs 16.9 tn through FY37. The company is also investing Rs 1 tn to produce green ammonia, green methanol, sustainable aviation fuel (SAF), and green urea. NTPC is also venturing into coal gasification to supply gas-based power stations during peak demand periods. Check out NTPC’s financial factsheet and quarterly results to know more. #3 Central Bank of IndiaThird on the list is Central Bank of India. The Central Bank of India operates a network of 4,585 branches, 3,819 ATMs, and 13,685 BC Outlets. The bank has a heavy rural focus, with 65% of its branches located in Rural and Semi-Urban (RUSU) areas. The company’s price-to-book (PB) ratio stands at 0.69, which is lower than the public sector bank median PB