5 Value Investing Stocks to Watch in this Volatile Market

The Indian stock market has taken a beating over the last few months. Sentiment has taken a hit, with even solid companies seeing their stock prices tumble.

For long-term investors, though, this could be a moment to pay attention. Market downturns have a way of shaking out weak hands, but they also open doors for those with patience and conviction.

Some high-quality stocks-companies with strong fundamentals, steady cash flows, and solid balance sheets-are now trading at reasonable valuations.

Companies with resilient business models, pricing power, and sustainable competitive advantages are trading at attractive levels.

The key is to separate businesses facing short-term headwinds from those with deeper structural issues. This is where value investing shines.

So which stocks are worth watching?

Here are five that could stand out for value investors.

#1 Persistent Systems

First on our list is Persistent Systems.

Persistent System has built a reputation as a leading digital engineering firm, offering services across cloud, AI, and product development. The company has consistently delivered strong revenue growth, with a focus on BFSI, healthcare, and hi-tech verticals.

But despite its solid fundamentals, the stock has corrected from its highs, in line with the broader market decline.

The Indian IT sector has been under pressure due to slowing global tech spending and Persistent has not been immune. The Nifty IT index has dropped from its peak, dragging down IT stocks, including Persistent.

While the company posted a 19.9% YoY revenue growth in Q3FY25, concerns over valuation and sector-wide demand softness have kept the stock under pressure.

Persistent Systems Financial Snapshot (2020-24)

	2019-2020	2020-2021	2021-2022	2022-2023	2023-2024
Revenue Growth (%)	6.85%	16.16%	36.54%	43.81%	18.84%
Operating Profit Margin (%)	17.52%	18.88%	19.30%	19.04%	18.36%
Net Profit Margin (%)	9.54%	10.76%	12.09%	11.03%	11.13%
Return on Capital Employed(%)	19.36%	23.70%	28.36%	31.43%	31.26%
Return on Equity (%)	14.50%	17.66%	23.00%	26.36%	25.86%

Source: Equitymaster

Between 2020-24, the sales have grown at a compounded annual growth rate (CAGR) of 23.6%, while the net profit at 25%. The Return on Capital Employed (RoCE) and Return on Equity (RoE) have averaged 26.8% and 21.5% over a 5-year period.

The management is confident in achieving its US$ 2 billion (bn) revenue target by FY27, with a focus on AI-led services and deeper client engagements. The company is also eyeing US$ 5 bn by FY31?.

Recent deal wins continue to be robust, including a US$ 150 m, 7-year BFSI transformation deal and a US$ 50 m, 5-year AI-led engagement?.

Valuations have declined after the correction. The stock is trading at a Price to Earnings ratio (PE ratio) of 62, lower than its peak PE of 81.

With a strong order book, deep hyperscaler partnerships, and AI-driven efficiencies, Persistent looks well-positioned to navigate near-term IT spending pressures while maintaining long-term growth momentum.

To know more about the company, check out its financial factsheet and latest quarterly results.

#2 Power Finance Corporation

Next on our list is Power Finance Corporation (PFC).

PFC is the backbone of India's power sector financing. PFC is a key lender for power generation, transmission, and distribution projects. It has also been growing its presence in renewable energy and infrastructure financing.

Despite its solid fundamentals, the stock has corrected from its highs, reflecting concerns over valuation and macroeconomic headwinds.

The broader market downturn has dragged down even fundamentally strong companies, and PFC was no exception. Investors also worried about potential asset quality risks and delays in disbursals.

However, the company's financials tell a different story.

PFC Financial Snapshot (2020-24)

	2019-2020	2020-2021	2021-2022	2022-2023	2023-2024
Net Interest Income Growth (%)	9.60%	26.40%	17.00%	-3.20%	8.40%
Net Interest Margin (%)	34.30%	37.60%	41.40%	39.40%	36.30%
Net Profit Growth (%)	-25.02%	65.83%	19.42%	12.84%	24.94%
Return on Assets (%)	1.00%	1.50%	1.80%	1.80%	1.90%
Return on Equity (%)	14.40%	19.30%	19.60%	18.90%	19.50%

Source: Equitymaster

PFC has done well between 2020-2024. Its interest income and net profit have grown at a CAGR of about 12% and 14.9%.

Importantly, its loan book remains strong, with 59% of sanctions from the past 2 years and 9 months still undisbursed. This provides visibility for double-digit loan growth over the next 2 years.

PFC's gross NPAs declined to 2.7% as of December 2024. Following the resolution of the KSK Mahanadi case, gross NPAs are expected to drop further to 1.9%.

Trading at just 1.2 times adjusted price to book (PB), PFC is reasonably valued compared to its peers. With strong project pipelines, stable margins, and a high dividend yield, it is well-positioned to weather near-term volatility.

To know more about the company, check out its financial factsheet and latest quarterly results.

# 3 ONGC

Third on our list is Oil and Natural Gas Corporation (ONGC).

ONGC is India's largest oil and gas explorer, playing a critical role in the country's energy security.

It's a key player in India's hydrocarbon sector, with vast reserves and ongoing investments in offshore and onshore projects. The company is also expanding into renewable energy and petrochemicals, aiming for a diversified energy portfolio.

Despite its strong fundamentals, ONGC's stock has corrected, mirroring the broader market weakness. Concerns over global crude price volatility, declining legacy production, and regulatory risks have weighed on investor sentiment.

In Q3FY25, ONGC's standalone EBITDA grew 13% YoY, but net profit fell 17% due to higher recouped costs?. Lower crude realizations also impacted earnings, with oil prices slipping from US$ 80 to US$ 72 per barrel.

ONGC Financial Snapshot (2020-24)

	2019-2020	2020-2021	2021-2022	2022-2023	2023-2024
Revenue Growth (%)	-6.11%	-22.43%	57.56%	28.44%	-5.42%
Operating Profit Margin (%)	14.45%	16.52%	16.58%	12.65%	18.04%
Net Profit Margin (%)	2.68%	5.89%	9.22%	4.95%	8.83%
Return on Capital Employed(%)	8.37%	10.98%	17.27%	13.96%	20.41%
Return on Equity (%)	5.43%	10.03%	20.52%	12.56%	18.42%

Source: Equitymaster

Between 2020 and 2024, ONGC has performed consistently, with sales and profit growing at a 5-year CAGR of 6.9% and 11%, respectively.

The company's RoCE and RoE have been stable, averaging 14.2% and 13.4%, respectively, supported by higher crude oil prices and growing production.

ONGC is on track to ramp up production from its KG-98/2 asset, which has already hit 35,000 barrels per day and is set to peak at 45,000 soon?.

The company expects gas output to double from 3 mmscmd to 10 mmscmd in the second half of FY25. A strategic partnership with BP aims to boost production at its Mumbai High field by 60% over the next decade?.

Trading at 5-year average price to book of 0.8 , ONGC offers strong cash flows, a robust dividend yield, and improving production visibility.

To know more about the company, check out its financial factsheet and latest financial results.

#4 Swiggy

Fourth on our list is Swiggy.

Swiggy has reshaped how Indians eat and shop. The company has built a dominant consumer platform, from food delivery to quick commerce via Instamart. But the stock has tumbled nearly 60% from its peak, raising concerns about its growth-at-any-cost strategy.

The primary issue? Losses remain high.

Despite a 31% YoY revenue jump in Q3FY25, Swiggy's quick commerce segment continues to burn cash. While GOV surged 88%, the contribution loss widened to Rs 24 per order.

Rapid dark store expansion and aggressive marketing spending have hurt margins. Meanwhile, competition from Zomato's Blinkit is intensifying.

Swiggy Financial Snapshot (2020-24)

	2019-2020	2020-2021	2021-2022	2022-2023	2023-2024
Revenue Growth (%)	187.34%	-28.22%	128.70%	42.40%	33.51%
Operating Profit Margin (%)	-102.80%	-45.83%	-56.34%	-46.02%	-16.08%
Net Profit Margin (%)	-112.70%	-63.28%	-63.18%	-50.27%	-20.75%
Return on Capital Employed(%)	-87.12%	-62.90%	-50.80%	-38.65%	-26.72%
Return on Equity (%)	-95.69%	-84.83%	0.00%	0.00%	0.00%

Source: Equitymaster

Still, the long-term story remains intact. Between 2020-2024, sales have reported a 5-year CAGR of 55%. However, the company is yet to churn out a profit.

Swiggy's food delivery arm is turning profitable, with its contribution margin improving on higher ad revenue and operational efficiencies.

Quick commerce, while loss-making, is a high-growth category, projected to hit US$ 27 bn by FY27. Swiggy expects breakeven by Q3FY26, with mature stores already improving unit economics.

The company's strong brand and leadership in two high-growth markets position it well for the future. While short-term pain is inevitable, investors with patience could see meaningful gains once profitability kicks in.

To know more about the company, check out its factsheet and latest quarterly results.

#5 Hyundai Motor

Last on our list is Hyundai Motor India (HMIL).

HMIL is the country's second-largest carmaker, with a stronghold in the SUV segment and a growing focus on electric vehicles (EVs).

It has consistently maintained a premium positioning, with models like the Creta and Venue dominating the market. The company has also made a strategic push into EVs, launching the locally manufactured Creta Electric to tap into India's growing demand for sustainable mobility.

Despite all this, HMIL's stock has come under pressure, falling in line with the broader auto sector.

In Q3FY25, its EBITDA margin declined to 11.3%, below expectations, due to a combination of higher domestic discounts, one-time employee costs, and sluggish demand?.

Export volumes were also hit by geopolitical tensions in the Middle East and Latin America?. Rising raw material costs and increased fixed expenses ahead of its capacity expansion have also weighed on investor sentiment.

Hyundai Motor Financial Snapshot (2020-24)

	2019-2020	2020-2021	2021-2022	2022-2023	2023-2024
Revenue Growth (%)	-0.50%	-5.90%	15.80%	28.10%	16.10%
Operating Margin (%)	11.70%	11.40%	12.80%	14.40%	15.20%
Net Profit Margin (%)	5.50%	4.60%	6.10%	7.80%	8.70%
Return on Capital Employed(%)	23.20%	17.30%	22.50%	33.10%	51.40%
Return on Equity (%)	17.50%	13.10%	18.00%	25.50%	39.50%

Source: Equitymaster

However, the long-term outlook remains strong. Between 2020-2024, HMIL's sales and net profit grew at a five-year CAGR of 10.4% and 18.6%, respectively.

The company has maintained a solid five-year average RoE of 29% and RoCE of 22%.

Its upcoming Talegaon plant will add capacity, supporting future growth?. Meanwhile, an expanding EV portfolio, a higher SUV mix, and focus on premiumisation should help sustain profitability.

The stock is trading at a PE of 22, below the industry average of 25. As the industry stabilises, the company's ability to navigate challenges while maintaining pricing discipline could drive a strong rebound.

To know more about the company, check out its factsheet and latest quarterly results.

Conclusion

Not every beaten-down stock is a bargain. The key is to focus on companies with strong fundamentals, steady cash flows, and resilient business models.

Whether it's industry leaders with solid balance sheets or companies in long-term growth sectors, investors willing to take a contrarian approach could find compelling opportunities in this downturn.

That said, caution is essential. Market recoveries can take time, and not all stocks will rebound equally.

Investors should align their picks with their personal risk profile, investment horizon, and tolerance for volatility. Value opportunities exist, but patience and discipline will be crucial in separating true bargains from value traps.

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...