3 Cash Flow Stocks Trading Below Fair Value In India

Inflation in the Eurozone and Spain is closely linked to energy prices, and that focus on rising price pressures has pushed central banks toward tighter policy. When rates move up, investors often pay more attention to what companies are really worth based on the cash they generate. This article highlights three stocks from the Undervalued Stocks Based On Cash Flows screener that currently trade below SWS DCF fair value estimates.

The three stocks below are just a starting sample, with the full screen surfacing 28 more companies that share similarly compelling cash flow stories and are not covered here. To identify and analyze the highest conviction ideas that fit your own criteria, head straight into the Undervalued Stocks Based On Cash Flows screener.

S H Kelkar (NSEI:SHK)

Overview: S H Kelkar is a long-established fragrances and flavors manufacturer that supplies personal, home and fabric care fragrances, as well as liquid, emulsion and dry mix food flavors, to FMCG companies and other manufacturers. This creates repeat-order, cash-generating contracts that fit the screener’s focus on cash flow potential. Alongside aroma ingredients and related research activities, this core fragrances and flavors engine is the main link to stable operating cash flows rather than one-off or speculative revenue streams.

Operations: S H Kelkar generates most of its revenue from the fragrance segment at about ₹36.1b, with a smaller contribution from flavors at roughly ₹3.4b. This highlights the importance of the core fragrances business to its cash flow profile.

Market Cap: ₹21.1b

Investors looking at S H Kelkar are primarily assessing the cash flow characteristics of a fragrances and flavors business that serves everyday consumer products, where repeat orders and FMCG contracts can underpin a DCF-driven valuation. At the same time, funding entirely through external borrowing, thinner margins at 3.6% and a relatively inexperienced management team add to the risk side of the analysis. The recent Q1 FY2026-27 performance provides additional data on how execution can influence outcomes, but it is not the entire picture.

Fragrance cash flows and thin 3.6% margins make S H Kelkar a tricky mix of resilience and pressure, so it helps to see the full picture in the 2 key rewards and 4 important warning signs (1 is major!)

Mangalore Refinery and Petrochemicals (BSE:500109)

Overview: Mangalore Refinery and Petrochemicals runs a large refinery that turns imported crude oil into everyday fuels like diesel, petrol, LPG and naphtha, along with petrochemical products such as polypropylene, paraxylene and benzene. These high volume refining and petrochemical operations, under the ONGC umbrella, are the main source of the steady operating cash flows that anchor its inclusion in the Undervalued Stocks Based On Cash Flows screener.

Operations: Mangalore Refinery and Petrochemicals generates essentially all of its ₹1,095.6b in revenue from the Downstream Petroleum Sector.

Market Cap: ₹295.4b

Investors looking at Mangalore Refinery and Petrochemicals are weighing a cash generating refining and petrochemicals business. SWS analysis suggests it trades about 49.4% below DCF fair value, set against meaningful cyclic and financial risks. The company has recently turned profitable again, with Q1 FY2027 revenue of ₹416,798.5m and net income of ₹9,456.8m. This provides fresher evidence of what its refining margins and petrochemical volumes can support. At the same time, debt is not yet well covered by operating cash flow and earnings remain sensitive to refining spreads and imported crude costs. If you want to see how this mix of upside and risk could affect free cash flow over time, the detailed DCF work is worth a closer look.

Mangalore Refinery and Petrochemicals has returned to profit and screens as materially below SWS DCF fair value. Before assuming the story is all about refining spreads, read the DCF valuation analysis for Mangalore Refinery and Petrochemicals to see what the cash flow math might be missing.

Ganesha Ecosphere (BSE:514167)

Overview: Ganesha Ecosphere converts discarded plastic bottles into recycled polyester staple fibre, yarns and rPET flakes and chips that feed into textiles, packaging and industrial products. Its cash flow hinges on steady demand from these repeat customers. This recycling led model, focused on rPET fibres and chips, is the clearest link to the Undervalued Stocks Based On Cash Flows screener, as it points to ongoing, contract driven orders rather than one off projects.

Operations: Ganesha Ecosphere generates its entire reported ₹15,682 million in revenue from the Synthetic Yarn & Fibre segment.

Market Cap: ₹27.2b

Ganesha Ecosphere may warrant a closer look for investors seeking exposure to cash flows tied to recycled plastics rather than traditional commodities. The company is in the middle of a capacity buildout in rPET granules and fibres, with Q1 FY2027 performance showing higher revenue and earnings from these operations. At the same time, the stock is reported to trade materially below SWS DCF fair value. The catch is that margins are thin and exposed to swings in PET scrap prices and to how quickly brand owners ramp up recycled content in bottles and textiles. If those volumes and margins track expectations, the cash flow profile and valuation story could look very different from today’s snapshot.

Ganesha Ecosphere’s recycled plastics story is tied to thin margins and a reported gap to SWS DCF fair value. However, the real tension sits in the cash flow detail inside the analysis report for Ganesha Ecosphere

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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