Value stocks are making a comeback in India. These 10 stocks could benefit

India’s investable value stock universe is showing signs of stabilising after a steep decline during the market’s previous bull run, creating fresh opportunities in energy, metals and select financial sectors.

The proportion of value stocks among the top 1,000 companies by market capitalisation has risen to 13% in August 2026 from 11% in 2024, according to a report by ICICI Securities. The universe had fallen sharply from 30% in 2022, with the biggest decline occurring between March 2023 and September 2024, when the Nifty 50 climbed about 54%.

The report defines an investable value stock as one with an earnings yield above the average India-US bond yield and return on equity above 14%.


“Post 2024, there were two episodes — the US tariff fear in 2025 and the West Asia crisis in 2026 — that sparked a moderate expansion in the universe of value stocks,” ICICI Securities said. Subsequent market rallies, however, reversed part of that improvement.

The brokerage’s current value-stock list, sorted by earnings yield, includes Vedanta, ONGC, Indian Oil Corp., Oil India, NMDC, BPCL, Hindalco Industries, NALCO, Just Dial and Petronet LNG.

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The 10 stocks on the screen

Vedanta has the highest earnings yield among the 10 stocks at 20%, followed by ONGC at 17% and Indian Oil at 15%. Oil India has an earnings yield of 13%, while NMDC has 12%.

BPCL and Hindalco Industries both have an earnings yield of 11%. NALCO, Just Dial and Petronet LNG each have an earnings yield of 10%.

Small caps remain the weak link

The decline in the value stock universe was led largely by small caps. The number of investable value stocks in the small-cap segment fell from 230 in March 2022 to 87 in August 2026.

By comparison, the large-cap universe has remained broadly stable. Large-cap investable value stocks stood at 24 in August 2026, compared with 23 in March 2022. Mid-cap value stocks declined from 26 to 16 over the same period.

The sector composition has also changed materially. Financial services and banks currently account for the largest pools of qualifying stocks, with 19 names each in August 2026. Industrials account for 15, consumption for 12, metals for 11, energy for 10 and IT for 10.

Materials, once among the largest contributors, fell from 53 qualifying stocks in March 2022 to nine in August 2026. Healthcare declined from 16 to three, while automobile and components fell from 14 to five.

Earnings could improve the value universe

ICICI Securities said a rising corporate profit cycle could help increase the number of stocks meeting its value criteria. The brokerage noted that the current range-bound market is being driven by geopolitical concerns, while corporate profitability is improving.

“The current phase of a range-bound market is driven by concerns of elevated geopolitics; alongside, a rising corporate profit cycle may improve the tally of investable value stocks ahead,” the report said.

The brokerage also cautioned that a further rise in global bond yields could make it harder for stocks to qualify as value investments, since the earnings-yield hurdle would increase.

Profit expectations remain strongest outside the benchmark index. The report estimates a 20% compound annual growth rate in profit after tax for the Nifty Midcap 100, excluding volatile-growth companies, between fiscal 2026 and fiscal 2028. The corresponding estimate for the Nifty Smallcap 100 is 22%, while the Nifty 50 is expected to deliver a 15% CAGR.

ICICI Securities’ framework is designed to avoid value traps, stocks that appear cheap but remain weak because their long-term fundamentals continue to deteriorate.

The screen therefore also looks for low speculative value, earnings yield above bond yields, a price-to-book ratio closer to 1 times depending on the sector, limited earnings downgrades and near-term catalysts.

The report says the value strategy depends on “avoiding value traps and identifying signs of recognition of value by the market.”

That leaves investors with a narrower proposition: the stocks may look inexpensive, but a rerating will still depend on earnings delivery, improving fundamentals and catalysts that can bring the market back to them.

(Disclosure: This article has been written by Nikhil Agarwal, who is not a SEBI-registered Research Analyst or an investment advisor. Nikhil Agarwal does not hold any financial interest in all the companies mentioned in the report as of the date of publication. The views/recommendations mentioned in this article, wherever applicable, are those of the respective SEBI-registered Research Analyst/brokerage and have been reproduced/reported with due attribution. They should not be construed as the views or recommendations of the EconomicTimes Digital or the journalist. Readers are advised to consider the original research report and make their investment decisions based on their own assessment.)