Several top-tier companies that are the leaders in their sectors have seen their stock prices drop in recent months because of temporary margin pressure, global demand slowdown, or macro-induced changes in sentiment.
In this article we explore some of India’s most reliable blue-chip stocks that are currently undervalued, offering long-term investors a potential opportunity.
#1 Trent Ltd
Trent is a retailer of clothes, footwear, accessories, toys, games, food, groceries, and non-food products. The company operates more than 875 stores of different types. These include:
- Fashion retailing (owned formats): Westside, Zudio, Utsa, Misbu and Samoh
- Fashion retailing (alliances): Zara and Massimo Dutti
- Grocery retailing: Star and other concepts
Trent is also expanding its business in beauty, innerwear and footwear, which have delivered a five-year sales CAGR of 149%, 92% and 73%, respectively.
The company has launched the My Star app to build stickiness with Star users through customised offerings, and conducts WhatsApp campaigns to achieve a higher average bill value.
FY25 was a relatively challenging year for India’s retail market as several headwinds, including inflation, hit discretionary spends. A young population, urbanisation, and digital proliferation drive consumption in India.
The fashion and lifestyle market is poised to grow at a 10-12% CAGR to ₹18 trillion by 2028. Consumers prioritise value, convenience, and experience. This favours brands with strong trust and agility. Premiumisation is also emerging in the food and grocery segment, with consumers willing to pay for convenience, quality, and wellness attributes.
Trent’s stock is currently down 35.5% from its 52-week high of ₹8,345.
Revenue grew at a CAGR of 37.9% over the past five years, while net profit grew at a CAGR of 70.7%. The five-year average return on equity (RoE) was 16.2% and return on capital employed (RoCE) was 27.3%.
For FY25, the company reported revenue of ₹17,135 crore, up 38.5%; net profit of ₹1,534 crore, up 3.9%; and a net profit margin of 8.95%.
To know more, check out Trent’s financial factsheet and quarterly results.
#2 Indian Railway Catering & Tourism Corporation
IRCTC is a Miniratna public-sector unit (PSU) and the only company authorised by the Indian government to provide online railway tickets, catering services, and packaged drinking water in railway stations and trains across India.
The company’s business includes:
- Catering: It offers food and beverage delivery services to train passengers. Its service portfolio includes mobile catering, e-catering, and static catering.
- Internet ticketing: Online ticket booking through its website and mobile app.
- Tourism: Packages for various durations and themes, catering to religious pilgrimages, wildlife adventures, or leisure getaways, and provides domestic and international air travel packages.
- Rail Neel: Rail Neer is a brand of packaged drinking water bottled and distributed by IRCTC for train passengers in India.
The company is highly optimistic about future growth, particularly in tourism and non-railway revenue, and is proactively addressing regulatory and operational challenges.
IRCTC’s stock is currently 24.5% below its 52-week high of ₹1,028.75.
Revenue grew at a CAGR of 18% over the past five years while net profit grew at a CAGR of 29.2%. The five-year average return on equity (RoE) is 32.4% and return on capital employed (RoCE) is 44.9%.
For FY25, the company reported revenue of ₹4,675 crore, up 9.73%; net profit of ₹1,315 crore, up 18.3%; Ebitda margin of 33.15%; and a net profit margin of 14.86%.
To know more, check out IRCTC’s financial factsheet and quarterly results.
#3 Infosys
Infosys provides consulting, technology, outsourcing, and next-generation digital services to help clients with their digital transformation. It’s the second-largest IT services company in India behind TCS.
Its revenue segments include digital services (57% of revenue), core services (43%), and products and platforms. The company’s deal pipeline remains solid but mega deals are fewer and tend to have longer gestation and ramp-up periods.
It faces uncertain macroeconomic factors such as US tariff announcements, longer and delayed client decision cycles, and ongoing geopolitical events and elections. Guidance from management is conservative and reflects this uncertain environment, but the company is confident of its ability to navigate both growth and cost-driven client agendas.
Infosys’s stock is currently trading 20.79% below its 52-week high of ₹2,006.45.
Revenue grew at a CAGR of 12.4% over the past five years, while net profit grew at a CAGR of 10%. The five-year average return on equity (RoE) is 29.2% and return on capital employed (RoCE) is 40.6%.
For FY25, the company reported revenue of ₹1.63 trillion, up 6.5%; net profit of ₹26,750 crore, up 1.9%; and a net profit margin of 16.4%.
To know more, check out Infosys’s financial factsheet and quarterly results.
#4 Larsen & Toubro
L&T is a multinational conglomerate that mainly provides engineering, procurement, and construction (EPC) solutions in key sectors. Its EPC business segment includes infrastructure, hydrocarbon, power, defence engineering, heavy engineering, and others. Its Service business segment includes IT, financial services, and development projects.
The company’s order book is at ₹5.79 trillion, up 22% year-on-year, providing multi-year revenue visibility. Management is cautiously optimistic, balancing a strong pipeline with external uncertainties.
The company is investing in future growth levers (green energy, semiconductors, data centres) to drive long-term shareholder returns. Management has provided revenue growth guidance of 15% and order inflow guidance of 10% for FY26.
L&T’s stock is currently 12.45% below its 52-week high of ₹3,963.5.
Revenue grew at a CAGR of 12% over the past five years, while net profit grew at a CAGR of 11.7%. The five-year average return on equity (RoE) is 13.9% and return on capital employed (RoCE) is 18.2%.
For FY25, the company reported revenue of ₹2.56 trillion, up 15.7%; net profit of ₹17,670 crore, up 13.7%; and a net profit margin of 6.9%.
To know more, check out Larsen & Toubro’s financial factsheet and quarterly results.
Conclusion
Market sentiment is short-lived, while business fundamentals are built over decades. Blue chip stocks may not offer huge overnight gains, but they can help you create wealth over the long term.
Note that a beaten-down blue chip stock may remain under pressure if foreign institutional investors keep pulling out or if sentiment remains negative despite strong fundamentals. Investors should evaluate a company’s fundamentals, corporate governance and valuation before making an investment decision.
Happy investing!
Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such.
This article is syndicated from Equitymaster.com
