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.
#2 Tata Motors
Second on the list is Tata Motors.
Tata Motors, under the Tata Group, is a leading global automobile giant with strong fundamentals.
It sells passenger (PV), utility, and commercial vehicles (CV) in about 125 countries. It also has presence in premium PV market through Jaguar Land Rover (JLR).
It leads the CV segment in India and ranks third in the PV segment. Moreover, it dominates the electric vehicle (EV) segment with a 62% market share (as of January 2025).
The stock trades at a price-to-equity (PE) multiple of 7.4, significantly lower than its competitors in the automobile sector.
In comparison, Maruti Suzuki trades at a PE of 25.2, Mahindra & Mahindra at 27.5, while Hyundai Motor at 23.4.
One of the reasons behind its low valuation is the high volatility in its earnings due to the inconsistent profitability of JLR, which contributes 71% to its consolidated revenue.
In terms of financials, it was a loss-making company until FY22. However, its financial performance improved after the post-pandemic buying increased demand for vehicles.
This momentum helped it turn the business around, posting profits in FY23 and FY24 after four consecutive years of losses. JLR’s turnaround also boosted its profitability.
This also helped it increase its return on capital employed (RoCE) and return on equity (RoE) to 25.86% and 37.5%, respectively, in FY24.
Looking ahead, the company aims to maintain its dominant position in the EV segment. To expand its EV portfolio, it plans to invest Rs 160-180 bn in its EV division by FY30.
Following this philosophy, it has renamed its EV business Tata.EV. It is also expanding its Sanand plant and setting up a 20-GW-hour lithium-ion battery manufacturing facility.
In addition, it plans to launch six EVs by FY26, bringing the total number of models to 10.
It has also set an ambitious target of increasing its market share in the PV segment to 18-20% by FY30 from 13.9% in FY24.
Meanwhile, JLR is expected to turn things around and become net debt free during FY25. It is also investing 15 bn pounds to electrify the brand by 2030.
Vehicle penetration in India is also lower than global norms, at around 30 vehicles per 1,000 people, and is expected to rise.
With its dominant position, Tata Motors is well-positioned to benefit from this growth.
The company will also demerge its PV and CV businesses, which could be an opportunity for value unlocking.
#3 Life Insurance Corporation
Third on the list is Life Insurance Corporation.
Life Insurance Corporation (LIC) is the largest insurance provider in India, with a market share of over 66.2% in new business premiums.
LIC is also the fourth largest insurer in the world based on life, accident, and health reserves, as ranked by S&P Global Market Intelligence.
The company offers participating and non-participating insurance products, such as unit-linked insurance products, savings insurance products, term insurance products, annuities, and pension products.
It manages an AUM of Rs 51 tn, which surged 16% in FY24 compared to FY23.
LIC trades at a PE of 11.3, significantly lower than its competitors in the life insurance sector. The company is also trading at below its IPO price.
In contrast, SBI Life Insurance trades at a PE of 59, HDFC Life at 76.3, and ICICI Lombard at 23.4.
LIC’s financials have consistently grown in the last five years, with revenue and profits growing at a CAGR of 8% and 73%, respectively.
The significant increase in LIC’s profit came after it changed its accounting policy regarding allocation of surplus.
LIC’s performance lags behind its competitors in key parameters, leading to low valuation. Moreover, it is also losing market share to private players in the industry.
Nonetheless, the valuation gap could narrow if fundamentals improve, which LIC is trying to do with product innovation.
The focus is on improving the product mix and on high-yielding products. It launched six high-yielding products in FY24 and four new non-par products in FY25.
Insurance penetration in India remains at 3.7% in FY24, lower than the global average of 6.8% in 2022. Moreover, the per capita premium remains at US$ 95, well below the global average of US$ 889. So there is a lot of room for growth.
The government is also considering introducing a composite license for the insurance sector. This would also allow LIC to enter the health insurance sector, providing a significant opportunity to tap into with its extensive distribution network.
#4 Vedanta
Fourth on the list is Vedanta.
Vedanta is a diversified natural resource group that explores, extracts, and processes minerals like zinc, lead, silver, copper, aluminum, iron ore, oil, and gas.
It is present in India, South Africa, Namibia, Ireland, Liberia, and the UAE. It generates over 65% of its revenue from India, followed by Malaysia (9%), China (3%), UAE (1%), and others.
Vedanta trades at a PE of 15, significantly lower than its competitors in the metal and mining sector.
In contrast, JSW Steel and Tata Steel trade at a PE of 70 and 66, Lloyd Metals at 38, and Jindal Steel and Power at 23.
Vedanta sales have grown at a CAGR of 9.3% over the last five years. However, profits have shown a negative growth of 5% due to volatility in metal prices.
Nevertheless, despite the volatility in profits, the company’s return ratios are strong, with RoE and RoCE averaging 24% and 25%, respectively.
The company generates substantial cash flow every year, and has paid an average dividend of Rs 37 per share to shareholders during the last five years.
Going forward, Vedanta plans to invest Rs 170 bn in its aluminum and power business, to tap into growing demand for aluminum in sectors like EVs, renewables, and infrastructure.
Additionally, Vedanta is expected to be a key beneficiary of the National Critical Minerals Mission (NCMM), which aims to accelerate exploration of critical minerals in the country’s onshore and offshore areas.
It has also reduced its debt by US$ 4.7 bn over the last two years, allowing it to use cash flow to increase capital expenditures and reward shareholders.
#5 Hindalco
Last on the list is Hindalco.
Hindalco, the flagship metals company of the Aditya Birla group, is one of the largest aluminum manufacturers in Asia.
It ranks among the top five global aluminum producers with an alumina capacity of 3.6 mtpa (million tons per annum).
Through its subsidiary, Novelis, the world’s largest recycler of aluminum, Hindalco manufactures automotive and beverage can sheets in North America, South America, and Europe.
Hindalco trades at a PE of 11, significantly lower than its peers in the metal space.
In contrast, JSW Steel and Tata Steel trade at a PE of 70 and 66, Lloyd Metals at 38, and Vedanta at 15.
Over the past five years, sales grew at a CAGR of 10.6% and, net profit increased by 13.1% CAGR.
Consequently, its RoE and RoCE averaged 10.5%, and 11.8% during the period.
Going ahead, the company is focused on downstream expansions in India, emphasising increasing contributions from value-added products.
This strategy aims to enhance profitability and protect the company from fluctuations in aluminum prices. It also expects to sustain its positive momentum in the copper business, which is driven by increasing volumes and robust demand.
Hindalco is also expanding its presence in critical minerals like copper and lithium, which are essential for EVs, renewables, and electronics.
Conclusion
The road to 2030 may be filled with market fluctuations, but value stocks with strong fundamentals and attractive valuations could emerge as top performers.
These stocks tend to outperform as economic cycles shift, benefiting from earnings stability and potential re-ratings.
Investors with a long-term horizon can use market corrections as opportunities to accumulate fundamentally strong businesses.
Nonetheless, to make informed decisions, it’s crucial to assess the company’s fundamentals, including its financial performance, corporate governance practices, and growth prospects.
Happy Investing.
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