10 Low PE Ratio Stocks in India

In recent times, many stocks have been trading at high valuations, making it a bit difficult for investors to find value stocks. In such times, stocks with low price-to-earnings ratios, i.e. stocks trading at low prices relative to earnings can prove to be a better investment option. The PE ratio helps indicate whether a stock is expensive or cheap relative to its earnings. But it is not right to invest just by looking at low PE – the company’s earnings, future growth and fundamentals should also be strong. 

In this blog, we will tell you about 10 such low PE stocks in India, which are worth considering for investment in 2025.

What is a Low PE Ratio and Why Does it Matters?

The Price-to-Earnings (PE) ratio is calculated by dividing a company’s current market price per share by its earnings per share (EPS), indicating how much investors are willing to pay for each unit of earnings. In simple words, if a company’s PE ratio is 10, it means that investors are paying ₹10 for the company’s ₹1 earnings. This ratio helps to tell whether a stock is expensive or cheap.

Types of PE Ratio

PE ratio is mainly of two types – Trailing PE and Forward PE. Trailing PE is based on the actual earnings of the last 12 months, while Forward PE is calculated on the basis of future estimated earnings. It is important to understand both while investing, as they show the valuation of the company from different perspectives.

Sector-wise Variations in PE Ratio

The average PE of every industry is different. For example, FMCG companies usually have high PE because their earnings are stable, while PE is low in metal, infrastructure or PSU sectors. Therefore, a stock cannot be called good or bad only on the basis of low PE, but it is important to understand it in the context of its sector.

Why do investors like low PE stocks?

Stocks with low PE ratio are often considered cheap and investors feel that there is scope for growth in them. If the fundamentals of the company are strong, then there is a possibility of getting good returns in the future. This is the reason why investors focusing on value investing constantly look for such stocks.

10 Best Low PE Ratio Stocks in India for 2025

Company	Current Market Price (in ₹)	Market Capitalisation (in ₹ crore)	P/E Ratio
Power Finance Corporation	416	1,37,136	5.60
Bank of Baroda	244	1,26,259	6.45
Coal India	382	2,35,416	7.14
ONGC	234	2,94,190	8.09
Indus Towers	336	90,550	9.28
State Bank of India	824	7,60,557	9.53
Tata Motors	652	2,39,937	11.1
GAIL	172	1,13,289	11.6
Life Insurance Corporation of India	906	5,73,234	11.7
Vedanta	430	1,68,127	12.5

Overview of the Top Low PE stocks in India

A brief overview of the Low PE Stocks in India is given below:

1. Power Finance Corporation (PFC)

PFC is a government-owned non-banking financial company and the primary lender to India’s power sector. It finances generation, transmission, and distribution projects, with a growing focus on renewable energy initiatives like solar and wind. The company is also upgrading its digital lending platforms for faster, more transparent approvals. Backed by strong government support and sector leadership, PFC plays a critical role in enabling India’s transition towards cleaner, more efficient power infrastructure while maintaining high operational expertise in project financing.

Know the Returns: 

1Y Return	3Y Return	5Y Return
-16.47%	339.18%	480.85%

2. Bank of Baroda

Bank of Baroda is one of India’s largest public sector banks with a strong domestic and international presence. It has been modernising operations by expanding digital banking services, enhancing its mobile banking offerings, and growing its retail and MSME portfolios. The bank is strategically increasing its branch and ATM network to improve accessibility. Its proactive measures in improving asset quality and customer experience have positioned it as one of the most progressive PSU banks adapting quickly to changing banking trends.

Know the Returns: 

1Y Return	3Y Return	5Y Return
0.16%	104.07%	419.94%

3. Coal India

Coal India is the world’s largest coal mining company, responsible for meeting a major portion of India’s energy requirements. It operates numerous mines and is expanding capacity through new projects like Kotre Basantpur and Chandragupt. The company is actively implementing modernization measures, focusing on technology adoption. While challenges such as labor disputes occasionally arise, Coal India retains its dominant position in the sector and is vital for energy security, while also contributing to infrastructure and industrial growth.

Know the Returns: 

1Y Return	3Y Return	5Y Return
-27.73%	69.16%	193.74%

4. ONGC

Oil and Natural Gas Corporation (ONGC) is India’s largest oil and gas exploration and production enterprise. Beyond its core hydrocarbon operations, ONGC is diversifying into clean energy sources including hydrogen fuel, biofuels, and offshore wind. The company is also working on optimizing resource utilization through innovative extraction techniques in regions like Arunachal Pradesh. With a strong emphasis on ESG practices, ONGC invests in environmental protection, community development, and sustainable business operations, maintaining its position as an energy sector leader.

Know the Returns: 

1Y Return	3Y Return	5Y Return
-29.71%	73.91%	194.02%

5. Indus Towers

Indus Towers is a leading telecommunications infrastructure provider, operating a vast network of mobile towers across India. Serving major telecom operators like Airtel and Reliance Jio, it plays a central role in enabling 4G and 5G connectivity. The company is expanding its network coverage while adopting energy-efficient and remote monitoring technologies to reduce operational costs and improve reliability. Indus Towers continues to drive digital connectivity by supporting telecom growth and fostering technological advancement in India’s communications ecosystem.

Know the Returns: 

1Y Return	3Y Return	5Y Return
-18.72%	72.44%	70.01%

6. SBI (State Bank of India)

State Bank of India is the country’s largest bank, offering a broad spectrum of retail, corporate, and rural banking services. It is at the forefront of digital innovation with mobile banking, UPI payments, QR-based solutions, etc. SBI also focuses on financial inclusion, reaching underserved regions via its strong network of branches and strong brand trust. SBI remains central to India’s financial system while adapting swiftly to evolving customer needs.

Know the Returns: 

1Y Return	3Y Return	5Y Return
0.53%	58.64%	323.05%

Read Also: SBI Case Study

7. Tata Motors

Tata Motors is a diversified automotive manufacturer producing passenger cars, commercial vehicles, and electric vehicles (EVs). The company has been focusing on its EV strategy and increasing exports to international markets. It is also driving innovation in connected and sustainable mobility while enhancing its market share in the commercial vehicle segment. Through its subsidiary Jaguar Land Rover, Tata Motors maintains a strong global luxury automobile presence, blending technology, design, and eco-friendly practices across its product lineup.

Know the Returns: 

1Y Return	3Y Return	5Y Return
-38.59%	35.56%	422.89%

Read Also: Tata Motors Case Study

8. GAIL

GAIL is India’s largest state-owned natural gas processing and distribution company. It operates an extensive network of pipelines and is expanding into new geographic regions, including the North-East and North-West. The company supports the growth of CNG and PNG infrastructure while adopting sustainable practices for greater efficiency. GAIL plays a pivotal role in promoting cleaner energy alternatives and aims to strengthen India’s transition towards a low-carbon economy through reliable gas supply infrastructure.

Know the Returns: 

1Y Return	3Y Return	5Y Return
-23.42%	96.26%	165.22%

9. Life Insurance Corporation of India (LIC)

LIC is India’s largest life insurance company, with decades of trust serving millions of policyholders. Its product portfolio spans life insurance, annuities, pensions, and investment-linked plans. In recent years, LIC has strengthened its digital footprint, enabling online premium payments, claims tracking, and policy servicing through mobile applications. The corporation integrates strong corporate governance practices post-listing while strategically diversifying investments across sectors. With unmatched reach and brand loyalty, LIC remains the backbone of India’s life insurance industry.

Know the Returns: 

1Y Return	3Y Return	5Y Return
-18.69%	32.74%	4.57%

Read Also: LIC Case Study

10. Vedanta

Vedanta is a diversified natural resources company engaged in mining and metals, including zinc, aluminium, copper, iron ore, etc. The company is actively trying to fulfil its ESG commitments, focusing on energy efficiency and sustainable mining practices. It has restarted key mining activities to boost production and is investing in modern technologies to improve operational performance. Vedanta’s integrated operations and multi-commodity portfolio allow it to leverage market opportunities across natural resources while aligning with global sustainability benchmarks.

Know the Returns: 

1Y Return	3Y Return	5Y Return
0.99%	66.41%	242.02%

Read Also: Vedanta Case Study

Key Performance Indicators (KPIs)

Company	Operating Margin (%)	Net Profit Margin (%)	ROE (%)	ROCE (%)
Power Finance Corporation	96.99	28.65	19.52	65.86
Bank of Baroda	27.41	15.99	14.14	2.12
Coal India	33.05	24.30	35.67	24.24
ONGC	9.95	5.62	10.54	11.15
Indus Towers	49.09	32.97	30.56	27.70
State Bank of India	21.80	16.09	16.87	1.91
Tata Motors	8.89	6.33	23.96	18.45
GAIL	9.09	7.72	14.64	11.59
Life Insurance Corporation of India	6.39	4.88	37.97	1.01
Vedanta	22.82	13.42	36.36	26.92

When a Low PE Stock is NOT always a Good Buy?

On seeing a low PE ratio, many investors immediately assume that this stock is cheap and will give good returns in the future. But this is not always the case. Sometimes there are some serious reasons hidden behind this low PE, which is important to understand.

• Unusual profits causing high EPS : Sometimes a company suddenly shows a big one-time profit – like selling an asset or getting tax exemption. This increases EPS and reduces the PE ratio, but it is not sustainable.
• Sector in decline : When low PE stocks belong to an industry in long-term decline such as one based on outdated technology or an obsolete business model, their future performance is likely to be weak.
• Value Trap vs Value Buy : Low PE can sometimes become a value trap too as stocks with low PE may look cheap but in reality have no prospects of further growth. 

Factors to Consider Before Investing in Low PE Stocks

Various factors to consider before investing in low PE stocks is given below:

• Evaluate the company’s future growth Potential : It is not right to assume a stock to be undervalued just by looking at low PE. First of all, it is important to see how strong the company’s business is, what is its future potential and how fast it is growing in its sector.
• Understand the real reason behind low PE Ratio : It is very important to analyze why the PE ratio of any stock is low. It is possible that the company is really undervalued, but it is also possible that its value in the market has fallen due to its poor financial condition. Investing without understanding the underlying reason can be risky.
• Do look at future earnings : Investing in low PE shares proves beneficial only when the company has the potential to earn good returns in the future. If the company’s growth is stagnant or the market share is continuously falling, then even a stock that looks cheap can be harmful.
• Industry and Peer Comparison is important : To evaluate a company with low PE, you should compare the company with other companies in the same sector. If the PE across the industry is low, it could be a sector-specific reason.
• Analyse management quality and company legacy : No matter how attractive the valuation, investing in a company with a poor track record of financial performance or untrustworthy management is unlikely to be a sound decision. Strong corporate governance and consistent performance should always take priority.

Conclusion

Low PE stocks are often considered cheap and attractive investment options, but it is not wise to base your decision on this single metric alone. It is important to also take into account the company’s growth prospects, industry position, management quality and long-term vision. With the right research, low PE stocks can indeed turn out to be multibaggers. It is advised to consult a financial advisor before investing.

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