Synopsis:
Here are five undervalued stocks identified by comparing their current PE ratios against industry averages and 5-year historical PEs. These companies exhibit strong fundamentals, healthy profitability, and consistent growth in sales and profits, making them potential candidates for investors seeking a blend of value and growth opportunities.
In the current market, investors are actively looking for stocks that offer growth potential yet remain attractively priced. A good measure is comparing a company’s current PE ratio with its industry average and historical PE. Based on this approach, here are five undervalued stocks that could offer both value and growth opportunities.
1. Suzlon Energy Ltd (CMP: Rs. 63.20)
Suzlon Energy is one of India’s prominent renewable energy solution providers, particularly in the wind energy sector. The company is fully integrated, handling everything from manufacturing wind turbine generators to installation, operations, and maintenance services. Its offerings include design, development, and manufacturing of critical wind energy components like rotor blades, towers, generators, and control systems.
Suzlon Energy Ltd has a market capitalization of Rs. 96,310 crore. Sales surged by 66.8 percent, from Rs. 6,529 crore in March 2024 to Rs. 10,890 crore in March 2025, while net profit soared by 213.9 percent from Rs. 660 crore to Rs. 2,072 crore during the same period.
Suzlon trades at a PE ratio of 41.85, significantly lower than the industry average of 62.78 and its 5-year PE of 99.13. It boasts a ROCE of 32.41 percent and ROE of 41.33 percent.
2. Natco Pharma Ltd (CMP: Rs. 911.85)
Natco Pharma is a research-driven pharmaceutical company with a strong presence in niche therapeutic areas. The company operates across finished dosage formulations, active pharmaceutical ingredients (APIs), and contract manufacturing services, making it a vertically integrated player in the healthcare space.
The company has a market capitalization of Rs. 16,280 crore. Sales rose by 10.8 percent from Rs. 3,999 crore in March 2024 to Rs. 4,430 crore in March 2025, while net profit climbed 35.6 percent from Rs. 1,388 crore to Rs. 1,883 crore during the same period.
With a PE ratio of 8.66, well below the industry average of 35.21 and its 5-year average of 25.91, Natco offers strong value. The company also maintains a robust ROCE of 32.80 percent and ROE of 27.98 percent.
3. Tanla Platforms Ltd (CMP: Rs. 615.50)
Tanla Platforms is a leader in cloud communications, providing A2P (application-to-person) messaging services that help businesses connect with their customers. Headquartered in Hyderabad, the company plays a significant role in the digital communication and messaging space.
The company has a market capitalization of Rs. 8,320 crore. Sales increased by 2.5 percent from Rs. 3,928 crore in March 2024 to Rs. 4,028 crore in March 2025, while net profit declined by 7.5 percent from Rs. 548 crore to Rs. 507 crore during the same period.
The stock trades at a PE ratio of 17.10 compared to the industry average of 45.62 and a 5-year PE of 24.48. Tanla also has a healthy ROCE of 29.19 percent and ROE of 24.10 percent.
4. SKF India Ltd (CMP: Rs. 4,499)
SKF India is a major supplier of engineering solutions, offering products in bearings, seals, mechatronics, and lubrication systems. The company caters to various industries, including automotive and manufacturing sectors, with a reputation for reliability and innovation.
The company has a market capitalization of Rs. 22,240 crore. Sales grew by 7.6 percent from Rs. 4,570 crore in March 2024 to Rs. 4,920 crore in March 2025.
While net profit rose by 2.5 percent from Rs. 552 crore to Rs. 566 crore during the same period. SKF trades at a PE ratio of 39.30, lower than the industry PE of 57.21 and in line with its 5-year average PE of 43.51. The company posts a strong ROCE of 28.82 percent and ROE of 21.43 percent.
5. Varun Beverages Ltd (CMP: Rs. 496)
Varun Beverages is one of the world’s largest franchisees of PepsiCo, producing and distributing a wide range of beverages. Its product lineup includes iconic brands like Pepsi, 7Up, Mirinda, Mountain Dew, Tropicana juices, and packaged water.
The company has a market capitalization of Rs. 1,67,743 crore. Sales jumped by 24.7 percent from Rs. 16,043 crore in December 2023 to Rs. 20,008 crore in December 2024. Net profit increased by 25.3 percent, from Rs. 2,102 crore to Rs. 2,634 crore during the same period.
The stock is currently trading at a PE ratio of 58.29, below the industry average of 79.09 and its 5-year average PE of 66.72. Varun Beverages also maintains a healthy ROCE of 24.85 percent and ROE of 22.49 percent.
Conclusion
These stocks stand out for trading at attractive valuations compared to their historical and industry PE ratios. Combined with solid financials and growth potential, they present compelling opportunities for value investors in the current market environment.
Written By Manan Gangwar
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