Five undervalued Nifty 50 stocks to watch for long-term growth

Several blue-chip firms have low PE ratios, stable fundamentals, and steady cash flows, making them attractive to long-term investors looking for growth and security. From energy and banking to metals, these stocks mix resistance with potential upside.

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Criteria

We focused on the Nifty 50 companies. These stocks have PE ratios lower than the median of approximately 33.32 (as of 11 October 2025), a strong three-year earnings CAGR, and a debt-to-equity ratio of less than 1.

Additionally, these companies must have no promoter pledges, and they must demonstrate growing revenue/profit growth over at least three years.

Coal India

Coal India Ltd is the largest coal mining company in the world. It’s a public sector unit that sells coal to major utilities, industries, and exporters.

In Q1 FY26, Coal India’s revenue dipped 1.7% year-on-year, to ₹35,842 crore from ₹36465 crore in Q1FY25.

The net profit excluding exceptional items was ₹8,734 crore, a drop of 20% on-year from the same period the previous year.

Even with a slight decline in sales, the operating margins increased to 35%. This growth was due to operating efficiencies and steady pricing.

The margins also improved because the power-sector demand was consistent, and coal prices recovered reasonably.

The company raised production guidance for FY26 by 5%, as it believes the domestic and export demand will increase.

The low debt (D/E ratio of 0.09) also helped increase profits. Coal India plans to increase coal production and also invest in sustainable coal technologies.

State Bank of India

The biggest bank in India, State Bank of India (SBI) is a public sector bank with branches in 29 countries. It offers corporate, retail, insurance, treasury, and investment banking services.

In Q1FY26, SBI’s revenue grew 6.3% on-year, to ₹1,25,729 crore from ₹1,18,242 crore in Q1 FY25.

The net profit was ₹22,121 crore with a 10% growth on-year for the same period. Growth in the net operating income and good control over expenses drove the net profit growth.

The gross NPA ratio fell to 1.83% in Q1FY26 from 2.21% in Q1FY25. The retail and SME lending stayed strong.

The bank’s strong balance sheet, low-priced deposits, and wide customer base aided in maintaining earnings. Its focus on retail lending and fee income also offered solidity.

The bank is expected to benefit from India's robust GDP growth outlook of around 6-6.5% in FY25 and FY26, which supports credit demand and financial sector growth.

While SBI may face some near-term pressure on its net interest margins, the overall outlook for the bank remains positive. Its strong capital base, comfortable loan-to-deposit ratio, and stable asset quality position it well for sustained growth.

Oil and Natural Gas Corp. Ltd

ONGC Ltd is India’s largest upstream oil and gas company, accounting for 71% of India’s local crude production.

It has four onshore and three offshore discoveries with growing exploration in Rajasthan, Maharashtra, and Assam. ONGC Videsh is the international arm and is present in 15 countries worldwide.

ONGC reported a drop of 3.47% on-year revenue in Q1FY26 to ₹1,63,108 crore from ₹1,68,968 crore in Q1FY25.

The net profit rose to ₹11,568 crore from ₹9,776 crore excluding exceptional items, driven by cost efficiency and stable overseas output.

The capital expenditure for exploration increased by 10% for FY26, aiming for improved hydrocarbon recovery.

The company gained from rising global oil and gas prices, along with efficient cost management. Its robust balance sheet has helped ONGC invest in discovery projects without raising debt (D/E is 0.55).

ONGC aims to boost domestic production and invest in renewable energy initiatives in addition to its oil and gas operations. It plans to increase production of oil and gas to 44.51 MMToE for FY26 and 45.61 MMToE for FY27.

Hindalco Industries Ltd

The flagship Aditya Birla company manufactures aluminium and copper. It also produces aluminium sheets, light-gauge, and extrusion products used for packaging in beverages, food, cans, and foils.

The company caters to the automotive, construction, and packaging sectors in India and abroad.

The revenue rose 13% on-year, from ₹57,013 crore in Q1FY25 to ₹64,232 crore in Q1FY26.

The net profit grew 22% on-year, reaching ₹4,004 crore. This rise was driven by efficient processes and improved product line-up. The numbers exclude exceptional items.

The growing demand from the automotive and construction sectors drove growth, while cost-control processes improved operating income. Its D/E is 0.52, indicating Hindalco’s debt is manageable.

Hindalco intends to increase green aluminium capacity and concentrate on high-return downstream products.

Indian Oil Corp. Ltd

IOC Ltd is the largest unified oil refining and marketing company in India. This Maharatna has a presence in refining, pipeline transportation, and petrochemical businesses, supplying fuel and lubricants across India and abroad.

The company is a leader in market infrastructure and manages over 19,500km of crude oil, gas pipelines, and petroleum products.

IOC’s revenue fell from ₹1,93,845 crore in Q1FY25 to ₹1,92,341 crore in Q1FY26.

The net profit rose to ₹6,808 crore, which is a growth of 93% on-year. Rising refining margins and fuel sales drove this increase.

Growing demand for fuel, proficient cost control, and improved refining margins drove profits. International crude volatility was offset because of a rise in prices.

IOC will expand its refining and petrochemical capacity and invest in biofuels.

Risks

Investors must check for volatility in crude, coal, and aluminium prices. Any change can impact income and margins.

The energy and banking sectors are vulnerable to government policies and environmental regulations. Any change can affect margins.

Slower industrial activity could impact the demand for banking services, fuel, or metals.

The export and imports of aluminium or copper can be influenced by rupee volatility.

Conclusion

The stock market is trading close to its historical average PE of 22-23, while many large-cap Nifty 50 stocks trade below their sector averages.

This could prove to be an opportunity for value-conscious investors who are looking for stocks with solid fundamentals.

India’s GDP may grow 6-6.5% in FY26. Several sectors, such as the energy, metals, and banking, may benefit due to increased industrial activity and increased consumer expenditure.

However, investors must not get carried away. Focus on companies with robust corporate governance, low debts, and healthy cash flows.

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.