How to Find Undervalued Stocks in India Using P/E and ROE
A deep dive into value metrics: P/E, ROE, debt-to-equity and margins. How to combine them to find undervalued NSE stocks.
P/E and ROE: The Core Value Metrics
The P/E (price-to-earnings) ratio tells you how much you pay per rupee of earnings. Lower P/E can mean undervalued stocks in India—but only if earnings are sustainable. ROE (return on equity) measures how efficiently a company uses shareholder capital. High ROE with reasonable debt often signals a quality business.
Screen NSE stocks with P/E below sector average and ROE above 15% to start. Avoid firms with very high debt-to-equity; our Value Picks and Quality Business screeners apply these filters automatically.
Combining Value with Growth
Undervalued growth uses the PEG ratio (P/E ÷ earnings growth rate). A PEG below 1 can indicate growth at a reasonable price. Our Undervalued Growth screener (F5) finds such stocks. For a technical entry trigger, use the Value + Momentum screener (TF1) to get both cheap valuations and rising price momentum.