8 NSE Stocks Trading 42–61% Below Graham Fair Value

A Graham Number screen as of 2 November flagged eight NSE names trading 42–61% below Graham fair value. The margin of safety runs from 43.9% at the shallow end to 61.2% at the deep end. I'll admit, that's the kind of gap that makes a value investor pause mid-sip. But the screen is arithmetic, not a standalone buy signal. The list includes [Indegene](/stock/INDGN) (NSE: INDGN), [LIC Housing Finance](/stock/LICHSGFIN) (NSE: LICHSGFIN), [Sammaan Capital](/stock/SAMMAANCAP) (NSE: SAMMAANCAP), [J&K Bank](/stock/J&KBANK) (NSE: J&KBANK), [REC](/stock/RECLTD) (NSE: RECLTD), [Power Finance Corp](/stock/PFC) (NSE: PFC), [Central Bank of India](/stock/CENTRALBK) (NSE: CENTRALBK), and [GIC Re](/stock/GICRE) (NSE: GICRE). The formula behind the Graham fair value is simple: the square root of 22.5 times trailing earnings per share times book value per share. It's deliberately conservative. It does not care about growth or optionality. For asset-light companies like [Indegene](/stock/INDGN), that's a real limitation. The company has a thin book value relative to its earnings profile, which can compress the Graham fair value output. I'm not saying Indegene is expensive or cheap. I'm saying the Graham Number is probably the wrong yardstick for a services business with low tangible capital. Why PSU Banks and Power Financiers Fail the Graham Fair Value Test The screen has a heavy PSU tilt. [Central Bank of India](/stock/CENTRALBK), [J&K Bank](/stock/J&KBANK), [REC](/stock/RECLTD), and [Power Finance Corp](/stock/PFC) all appear. That's not an accident. These names have traded below book value for years because the market doubts the durability of their earnings and the quality of their assets. [REC](/stock/RECLTD) and [Power Finance Corp](/stock/PFC) are the two I find more interesting. They are not typical banks. They finance power and infrastructure projects, and they earn a steady spread. On FairStock Score, these two often look stronger, with scores above 70 on valuation and d...