Trent to JSW Energy: Here are 10 beaten-down stocks to watch out for

Over a quarter of BSE200 stocks are down 20 per cent, leading to a sharp fall in their equity valuation, creating opportunities for investors

The equity market has hit a bump after two years of double-digit returns. The benchmark BSE Sensex is down 4.8 per cent during the 12 months ending September 2025, its worst yearly show in more than a decade. For comparison, the index was up 28.1 per cent during the year ending September 2024, and was up 14.6 per cent during the 12 months ending September 2023. With this, the index has delivered negative returns in three out of last six years ending September.  

The broader equity market has been hit harder than the decline in the BSE Sensex suggests. Nearly two-thirds of the BSE200 companies (130 out of 196 companies) saw a decline in their share price during the year ending September 2025 and more than a quarter (55 out of 196 companies) have declined by 20 per cent or more. In other words, the downturn in the equity market has been widespread and hit almost all equity portfolios in the last one-year.

 

One upside of the market decline is that it has brought down equity valuation from their record high levels in 2024. Over a longer term, there is a positive correlation between returns and the equity valuation at the time of investment. The relatively low equity valuation of many blue chips stocks provides a good entry point for long-term investors. However, investors are advised to be selective as the valuation in the broader market still remains higher than long-period averages. For example, Sensex’s  current trailing price-to-earnings multiple at 23.2x is lowest in the last two years but still higher than 20-year average of 22x.

 

Here are 10 stocks from the  BSE200 index that have seen double-digit decline in their share price and equity valuations in the last 12 months. Besides, these stocks offer the best combination of low valuation,  earnings resilience in recent  quarters and relatively high return on net worth. This gives downside protection to investors and an upside potential when the market sentiment turns positive. 

 

Trent

• Topline growth has moderated over the past few quarters while margins have improved, led by cost control
• Margins expected to sustain as the retail major continues to realise benefits from the firm-wide RFID implementation, resulting in superior employee cost efficiency
• Growth could improve due to rising store openings as it targets a bigger share of the fast/value-fashion pie through Westside and Zudio, while adding new formats like Utsa
• Foray in the affordable beauty segment and lab-grown diamonds are additional growth levers
• Antique Stock Broking is positive on the company given its disciplined approach towards enhancing store experience, improving profitability, and return ratios, while scaling up operations

 

Varun Beverages

 

• Though a weak summer saw the firm report a 2.5 per cent Y-o-Y decline in revenues in the June quarter, operating profit margins were at an 8-year high led by other expenses and currency tailwinds in international business
• Among the largest Pepsico franchises globally, undertaking bottling and distribution of Pepsi, Slice, Gatorade, etc, Varun is focussed on driving growth through capacity enhancement and product diversification, including the strategic entry into snacks segment
• International expansion remains a key priority, with particular focus on South Africa and other high-potential geographies, where the company is considering acquisitions
• While it seeks to tap into the growing demand through new greenfield plants and expanding its distribution presence, it is maintaining profitability via operational discipline and cost efficiency

 

Colgate-Palmolive (India)

 

• Firm expects a gradual recovery in the second half of FY26 as recent quarters were pegged back by subdued urban demand and elevated competition
• Even as the entry-level segment of the toothpaste business is suffering from demand pressures, the premium segment continues to register good growth
• 95 per cent of its portfolio (toothpaste and toothbrushes) has witnessed a reduction in GST rates, with the firm cutting prices by 7-14 per cent.
• Colgate’s long-term prospects remain intact from core toothpaste brands and premiumisation through science-backed innovations 
• Valuations seem fair at 42 times its FY27 earnings estimates and are in line with the five-year and ten-year range of 41-42 times

  Tata Consultancy Services

 

• India’s largest IT services firm is expected to register a 1.2 per cent sequential growth in the September quarter with operating profit margins rising 10 basis points
• While there is a one-month impact due to wage revision and lower utilisation, this is expected to be offset by rupee depreciation-led margin tailwinds and savings from workforce optimisation
• In addition to cross currency tailwinds, the sector and TCS may gain from stable pricing, opportunities from agentic AI and momentum in BFSI and hi-tech segments, says ICICI Securities
• Motilal Oswal Research believes that pyramid and productivity gains remain key levers, but pricing pressure, client behaviour, and the GenAI transition signal a start of realignment as vendors adapt pricing and delivery models

  Tata Elxsi

• A soft June quarter saw revenues fall 3.9 per cent sequentially
• However, revenues are slated to grow 1 per cent sequentially reflecting a gradual recovery
• Margins are expected to improve gradually over the next three quarters though they might stay below FY25 levels on an annual basis
• Among key verticals, transportation, which accounts for 50 per cent of revenues, is showing signs of recovery, particularly with the stabilisation of the JLR account and strategic wins
• Media and communications could also recover in Q2 on the back of consolidation deals
• With strong client relationships, differentiated capabilities, and strategic positioning across verticals, Tata Elxsi is well-placed for sustained growth, says HDFC Securities

  Thermax

 

• Stock price is down 37.9 per cent during the trailing 12 months (TTM) ending September, significantly underperforming the BSE Sensex, which is down just 4.8 per cent
• In Q1FY26, the company’s net sales were down 1.6 per cent Y-o-Y, while its net profit was up 31.6 per cent Y-o-Y
• Thermax’s equity valuation has declined sharply from record levels last year but remains on the higher side compared to the broader market
• The stock’s trailing price to earnings (P/E) multiple is down to 56.2x from 100.3x at the end of Sep 2024, while its price to book value (P/BV) ratio has shrunk to 9.5x from 17.2x from a year ago
• Analysts expect gradual recovery in the stock price as Thermax is well placed to gain from increasing thrust on energy transition & de-carbonisation
• The management remains optimistic with a minimum of 10-11 per cent CAGR revenue growth over the next five years

  REC

• The public sector power project financier has seen a sharp decline in share price on market concerns over growth and earnings slowdown
• Share price is down 32.7 per cent in the last one year, underperforming the benchmark indices by a big margin
• The company's gross interest income was up 12.7 per cent Y-o-Y in Q1FY26, growing at the slowest pace in the last two-years
• Net profit was up 29.1 per cent Y-o-Y in the quarter on gains from decline in provisions for bad loans
• Analysts at Elara Capital remain upbeat on the stock given a sustained decline in bad loans in recent quarters, uptick in new loan sanctions and low valuations
• The stock is currently trading at a TTM P/E multiple of 5.8x and P/BV of 1.3x, both among the lowest in the non-bank lending space

  ACC

 

• The Adani group-owned cement maker has seen a steady decline in its share price and equity valuation in the last 12-months due to concerns over growth and earnings slowdown
• Share price is down 27.3 per cent during the TTM ending September 2025 while its trailing P/E has declined by 37 per cent and P/BV ratio is down 36.3 per cent
• Saw a Y-o-Y uptick in revenue and earnings growth in Q1FY26, but they were down on a sequential basis
• Company's net sales were up 17.1 per cent Y-o-Y but net profit was up just 4.4 per cent Y-o-Y in Q1FY26, as margins declined and it had to pay deferred tax
• Analysts at Elara Capital expect a gradual recovery in ACC’s share price as valuation is low and as they see a recovery in cement demand going forward
• ACC is currently trading at trailing P/E of 14.7x and P/BV of 1.9x, among the lowest in the industry

Bajaj Housing Finance

 

• Seen steady decline in share price and equity valuation since its stellar initial public offer (IPO) and listing on bourses last year
• The lender's share price is down 28.6 per cent since September last year, while its P/BV has more than halved in the period
• Trailing P/E has now shrunk to a more reasonable 40.5x from a pricey 73.2x at the end of September last year
• Bajaj Housing remains one the fastest growing mortgage lenders and its gross interest income was up 18.7 per cent Y-o-Y while its net profit was up 20.9 per cent Y-o-Y in Q1FY26
• Analysts at Motilal Oswal Securities expect the company's assets and net profit to grow at a CAGR of 22 per cent over the next three years, making it one of the fastest growing mortgage lenders
• Brokerage expects a gradual recovery in the stock price but sees sub-par returns given high valuations

 

JSW Energy

 

• Seen a sharp decline in its share price in last one year as investors brace for a growth and earnings slowdown
• The share price is down 27 per cent since the end of September 2025 despite the company reporting strong revenue and earnings growth in recent quarters
• Net sales were up 78.6 per cent Y-o-Y and net profit was up 42.4 per cent Y-o-Y in Q1FY26 driven by acquired assets
• Analysts remain upbeat on the stock given the company's capacity addition plans in thermal, wind and solar power segments
• According to Motilal Oswal Securities, JSW Energy is on track to achieve 30 Gw of generation and 40 GWh of storage capacity by FY30, nearly two times its current capacity
• The upside, however, could be sub-par given its high valuation with P/BV of 4.2x and relatively low return on net worth of 7.9 per cent