Top 5 Undervalued Large Cap Stocks Under ₹500 With Lower P/E Than Industry Average
Top 5 Undervalued Large Cap Stocks : In the world of stock market investing, identifying fundamentally strong and undervalued stocks can give investors a significant edge. One powerful metric that helps in identifying undervalued opportunities is the Price-to-Earnings (P/E) ratio. A company with a lower P/E than its industry average often signals that it might be undervalued – especially if the fundamentals are solid.
If you’re looking to build a long-term portfolio with potential multi-baggers, we’ve curated a list of five large-cap Indian stocks trading under ₹500 with a P/E ratio lower than their industry average. These companies come from diverse sectors – from IT to FMCG and infrastructure – and have consistently delivered returns and profits over the years.
Here are the top 5 undervalued large-cap stocks under ₹500 that should be on your watchlist:
1. ITC Ltd
ITC Ltd is a household name in India, with business segments spanning cigarettes, FMCG, hotels, packaging, agri-business, and more. It continues to maintain market leadership in its legacy businesses and is now gaining ground in new-age FMCG sectors such as branded foods, personal care, and stationery. With a stock P/E of 27.5, significantly lower than the industry average of 32.5, and robust historical returns, ITC looks well-poised for long-term wealth creation.
2. Wipro Ltd
Wipro is one of India’s top-tier IT companies offering services in software development, systems integration, BPO, and R&D outsourcing. Despite operating in the high-growth tech sector, Wipro’s stock P/E is 19.4, while the industry P/E is 29.8. This discount, combined with consistent profitability and global client base, makes Wipro an attractive bet for value investors.
3. Indus Towers Ltd
Indus Towers is India’s largest telecom infrastructure company with presence across all 22 telecom circles. It supports major players like Bharti Airtel and Vodafone Idea, offering long-term contracts for tower usage. The stock trades at a P/E of 10.3, compared to an industry average of 13.7, and has posted a 5-year CAGR profit growth of 19.34%, making it a fundamentally strong pick at an undervalued price.
4. Samvardhana Motherson International Ltd
Samvardhana Motherson is a global leader in automotive components, including mirrors, polymer modules, and wiring harnesses. Despite being a key supplier to OEMs worldwide, the stock trades at a P/E of 23.2, slightly lower than its industry average of 24.1. With a global presence and strong product portfolio, Motherson offers a mix of value and future growth potential.
5. Hindustan Zinc Ltd
Part of the Vedanta Group, Hindustan Zinc is a dominant player in zinc, lead, and sulphuric acid production. With a market share of over 75% in the Indian zinc market, the company has a commanding presence in mining and smelting. The stock trades at a P/E of 17.1, while the industry average is 30.2, reflecting deep value. Its strong fundamentals and consistent returns make it a compelling pick for long-term investors.
📊 Financial Overview of the Top 5 Undervalued Stocks
| Company | Stock Price (₹) | Market Cap (Cr) | Stock P/E | Industry P/E | 5-Yr Profit CAGR (%) | 5-Yr Stock Return CAGR (%) |
|---|---|---|---|---|---|---|
| ITC Ltd | < ₹500 | ₹5,38,545 | 27.5 | 32.5 | 10.08 | 22.1 |
| Wipro Ltd | < ₹500 | ₹2,52,668 | 19.4 | 29.8 | 4.26 | 21.48 |
| Indus Towers Ltd | < ₹500 | ₹1,03,647 | 10.3 | 13.7 | 19.34 | 17.32 |
| Samvardhana Motherson Intl Ltd | < ₹500 | ₹99,387 | 23.2 | 24.1 | 7.55 | 27.31 |
| Hindustan Zinc Ltd | < ₹500 | ₹1,72,900 | 17.1 | 30.2 | 9.22 | 19.42 |
✅ Key Takeaways
- All 5 companies are large-cap with strong market leadership.
- Each stock is priced under ₹500, offering affordable entry points for retail investors.
- The P/E ratio of these stocks is lower than their industry average, indicating potential undervaluation.
- These companies also have a history of consistent profit and stock performance over the past 5 years.
❓Frequently Asked Questions (FAQs)
Q1. Why should investors look at P/E ratio when picking stocks?
A lower P/E ratio compared to industry average can indicate that a stock is undervalued and may offer higher upside potential, provided the fundamentals are strong.
Q2. Why are all these stocks priced under ₹500?
Stocks under ₹500 are typically more accessible to retail investors. They also tend to be under the radar, making them attractive for early accumulation before larger institutions take notice.
Q3. Is ITC still a good investment despite being an old company?
Yes, ITC is reinventing itself with strong growth in FMCG, agri, and personal care sectors while maintaining leadership in traditional businesses.
Q4. What makes Wipro a good buy now?
Despite global tech pressures, Wipro trades at a significant discount to industry P/E and has a solid client base, making it a value pick in the IT space.
Q5. Are these stocks suitable for long-term investment?
Yes, based on consistent 5-year CAGR in profits and stock returns, these companies demonstrate solid long-term fundamentals.
If you’re a value investor or someone building a portfolio for long-term wealth creation, these undervalued large-cap stocks should definitely be on your watchlist.
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