According to an NDTV Profit analysis of Bloomberg data, six stocks now trade below their five-year average valuations despite maintaining strong analyst support. The analysis covered companies tracked by at least 10 analysts and found that these stocks moved from trading at steep premiums to their historical valuations to trading below their long-term averages. As reported by NDTV Profit, analysts tracked by Bloomberg see upside potential of as much as 35.9% in some of these stocks, even after a broad market selloff that began on February 27 following the US-Iran conflict. The current market environment presents additional challenges including lingering impacts from tariffs, growing signs of brittleness in the economy, a higher-for-longer inflation environment, interest rates, and even growing AI disruption and geopolitical unrest.
Star Cement stands out among the screened companies, trading below its five-year average valuation while carrying buy ratings from 87.5% of analysts and offering implied upside of 35.9%. According to the NDTV Profit analysis, Dalmia Bharat also trades below its historical average valuation with analysts seeing upside of 26.6% and 65% of those tracked by Bloomberg recommending buying. APL Apollo has buy ratings from 90.5% of analysts and implied upside of 23.4%, while Supreme Industries carries buy ratings from 90% of analysts with return potential of 22.6%. Nuvoco Vistas trades below its five-year average valuation after one of the sharpest reratings in the group, with analysts seeing upside of 21.2% and 79.2% recommending buying.
The shift comes as Indian equities continue to trade below levels seen before the Iran conflict began. As reported by NDTV Profit, the Sensex and Nifty fell as much as 13% by the end of March and have yet to recover their February 27 levels. Higher crude oil prices, inflation concerns, foreign investor outflows and pressure on the rupee weighed on sentiment during this period. Brent crude rose as high as $120 a barrel during the conflict, prompting investors to reassess valuations across sectors. The current market uncertainty is further compounded by AI disruption, geopolitical unrest, and an uncertain inflation and interest rate environment that are expected to persist for the foreseeable future.
Several stocks that traded at steep premiums to their historical valuations before the market selloff have now moved to trading below their long-term averages. According to the NDTV Profit analysis, Prestige Estates Projects Ltd. traded at nearly 290% above its five-year average price-to-earnings multiple on February 27, which narrowed to about 113% by June 4. JSW Steel Ltd. traded at 88.1 times earnings on February 27, nearly 279% above its five-year average multiple of 31.5 times, but by June 4 the stock traded at 14.4 times earnings, below its historical average. Indian Oil Corp. Ltd. traded at 19 times earnings on February 27, around 249% above its five-year average valuation, but by June 4 the stock traded at 4.5 times earnings, below its historical average.
