3 Indian Stocks Trading Below Estimated Fair Value on Cash Flow

Global bond yields keep swinging as investors react to inflation worries and changing central bank expectations, which is putting more focus on cash flows and valuation. When money is not cheap, investors often pay closer attention to what they are really buying. That is where the Undervalued Stocks Based On Cash Flows screener comes in. This article highlights 3 stocks that currently screen as undervalued on this basis.

The three stocks below are only a starting sample, since the full screen surfaced 26 more companies with equally compelling cash flow stories that are not covered here.

To see the complete list and focus on the ideas that best fit your style, head straight to the Undervalued Stocks Based On Cash Flows screener to identify, compare, and analyze your highest conviction cash flow opportunities.

Entero Healthcare Solutions (NSEI:ENTERO)

Overview: Entero Healthcare Solutions is a Mumbai based distributor of pharmaceuticals, medical devices and hospital consumables, supplying retail pharmacies, hospitals and clinics across India, while also selling a growing range of private label products under the Entero Surgicals brand. Its core healthcare product distribution network, which covers importing, central warehousing, redistribution and last mile delivery, is the main link to the Undervalued Stocks Based On Cash Flows theme because it relies on recurring B2B contracts and repeat orders.

Operations: Entero generates all of its ₹71,278.88 million trading revenue from pharmaceutical and surgical products in India.

Market Cap: ₹61.96 billion

Entero Healthcare Solutions provides exposure to a large scale healthcare distributor whose cash flow profile is anchored in contract based B2B distribution and private label lines that our DCF work suggests the market may be undervaluing. Revenue of ₹66,104.49 million and net income of ₹1,150.42 million in FY2026, along with Q1 FY2027 earnings momentum, indicate a business that is already converting its network into cash generation, while new subsidiary Qurovia Lifesciences aims to deepen that reach. The catch is that growth has leaned heavily on acquisitions and higher risk borrowings, and competition from e pharmacy platforms is intensifying. Investors weighing those risks against the current discount to estimated future cash flows may find Entero worth a closer look.

Entero Healthcare Solutions looks like a classic case where cash generation and acquisitions may be masking what really matters. Review the DCF valuation analysis for Entero Healthcare Solutions to see what the current discount might be hiding.

Build your own cash flow shortlist around Entero Healthcare Solutions

Entero Healthcare Solutions and the two other stocks in this list all came from a single Simply Wall St screen, but the real edge comes when you design your own filters. Use our flexible Screener to mix valuation, cash flows, quality and risks into a shortlist that suits you, or tap into our curated Investing Ideas for ready made starting points.

S H Kelkar (NSEI:SHK)

Overview: S H Kelkar is a Mumbai based manufacturer of fragrances, flavors, and aroma ingredients, supplying everything from personal and home care scents to food flavoring agents to domestic and multinational FMCG customers, MSMEs, and other manufacturers in India and overseas. Its long running fragrance and flavor contracts are the main link to the Undervalued Stocks Based On Cash Flows theme, since these repeat orders underpin the cash flows used in SWS DCF valuation, even though the company also operates in related research and custom synthesis areas.

Operations: S H Kelkar generates most of its revenue from fragrance products at ₹36,051.6 million, with a smaller contribution from flavors at ₹3,411.6 million, alongside segment level adjustments.

Market Cap: ₹21.8 billion

S H Kelkar provides direct exposure to the fragrance and flavor supply chains that underpin everyday consumer products, with cash flows anchored in long term relationships with domestic and global FMCG clients. The stock currently trades below the SWS DCF estimate, and Q1 FY2027 results showed revenue of ₹6,632.3 million and net income of ₹454 million, which is relevant to the cash flow profile highlighted by the screen. Available forecasts indicate expectations of faster earnings growth than the broader Indian market, and investors still need to weigh factors such as margin pressure, heavier debt funding, and interest coverage. The investment case will depend on how effectively management’s margin initiatives and inventory reductions translate into steadier cash generation and how that compares with the current valuation.

Fragrance and flavor cash flows at S H Kelkar may be telling a different story to the share price, especially with recent earnings detail and balance sheet questions in play. Walk through the analysis report for S H Kelkar to see what could be missing.

Mangalore Refinery and Petrochemicals (BSE:500109)

Overview: Mangalore Refinery and Petrochemicals is a refinery based in Mangalore that processes crude oil into fuels like petrol, diesel, LPG and naphtha, as well as petrochemical products such as paraxylene and polypropylene. These are the core cash flow drivers underpinning its SWS DCF valuation in the Undervalued Stocks Based On Cash Flows screener.

Operations: Mangalore Refinery and Petrochemicals generates all of its ₹1,095.6b revenue from the downstream petroleum sector.

Market Cap: ₹309.9b

Mangalore Refinery and Petrochemicals is attracting attention because its refining and petrochemicals cash flows, from products like diesel, petrol and polypropylene, are screened as trading at a large discount to SWS fair value, while earnings are forecast to grow 52.05% a year. Recent Q1 FY2026-27 results, with revenue of ₹416.8b and net income of ₹9.46b, indicate strong operating cash flow potential as the company focuses on cost cuts, higher throughput and a growing retail footprint. At the same time, heavy reliance on imported crude, high leverage and debt that is not well covered by operating cash flow mean the story is not risk free. For investors who can weigh those funding and energy transition risks against the discounted cash flow profile, there is more to consider.

Mangalore Refinery and Petrochemicals looks like a classic cash flow story where discounted refining earnings and petrochemical exposure may be masking something important. Review the analysis report for Mangalore Refinery and Petrochemicals to see what the balance sheet and throughput plans might be hinting at next.

Seeking Fresh Alternatives Before Others Do

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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