The recent stock market correction has been brutal, with stocks falling like a pack of cards.
Consequently, the Nifty has corrected about 16%, and mid and small-cap indices have fallen more than 20%.
Though the correction will subside gradually, the volatility is expected to continue, mainly due to Donald Trump’s unpredictable policies.
During such times, investors look for stability in defensive stocks, fundamentally strong companies, or undervalued opportunities.
Such stocks perform well during market downturns or consolidation phases due to attractive valuations.
This piece highlights five value stocks that could be among the best-performing investments through 2030.
#1 Power Finance Corporation
First on the list is Power Finance Corporation (PFC).
It is India’s largest government-owned non-banking financial company (NBFC), with the highly coveted Maharatna status. It is also the most profitable company in the NBFC sector.
It provides financing to companies operating in the power sector, specifically projects in power generation, transmission, distribution, and renewable energy.
PFC is trading at a price-to-book (PB) valuation of just 1.1, significantly lower than its peers in the NBFC sector. IRFC trades at a PB of 3, while IREDA trades at a PB of 4.1.
The rising demand in the power sector has been a boon for its steadily growing financials. Over the last five years, its interest income and net profit have grown at a CAGR of 12% and 15%, respectively.
Consequently, PFC stock prices have also grown at a CAGR of 31.7% during the period.
It has also distributed 25% of its net income as dividend. This offers investors a combination of steady income and capital appreciation.
Sector-wise, power demand in India is expected to grow at a CAGR of over 7% in the coming years due to rising capital expenditure.
The power sector needs huge investments of around Rs 42 trillion (tn) in the coming decades. 85% of this capex is expected to be directed toward power generation.
PFC’s dominant position as a leading financier in the power sector, with robust loan growth, strong asset quality, robust earnings growth, makes it well-positioned to capitalize on this opportunity.
The company expects its assets under management (AUM) to grow at 12-13% for the next two financial years.
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