Top High Book Value Stocks in India

Book value is the company’s net asset value, calculated as total assets minus total liabilities. It is the liquidation value available to shareholders and is a fundamental metric for value investors looking for stocks trading below their intrinsic value.

For example, if XYZ Ltd. has ₹10,00,000 in assets and ₹4,00,000 in liabilities, its book value will be ₹6,00,000. The calculation and formula are discussed in the latter section.

1. Reliance Industries Ltd: Reliance Industries is India’s diversified firm in refining, petrochemicals, retail, and digital services. It is also driving telecom growth with Jio and maintaining leadership with large-scale energy and retail operations.
2. HDFC Bank Ltd: HDFC Bank is among the top private banks known for retail and corporate banking. It leverages strong digital platforms and offers extensive financial products focused on customer convenience and technology innovation.
3. State Bank of India: SBI is India’s largest public sector bank serving millions, with extensive rural reach, and a focus on digital banking and government-related financial services.
4. Oil and Natural Gas Corporation Ltd: ONGC is India’s leading public energy company, dominating crude oil and natural gas production, with integrated operations and global exploration through its international subsidiary.
5. ICICI Bank Ltd: ICICI Bank is a major private bank providing diverse financial services, emphasising digital innovation and comprehensive solutions for retail, corporate, and wealth management clients across India and abroad.

Here is how you can invest in the high book value stocks:

1. Open a demat/trading/stockbroker account. You can open a demat account with smallcase!
2. Conduct thorough research into the top high book value stocks by sorting book value from high to low in India using Tickertape Stocks Screener. The screener offers over 200 built-in filters, allowing investors to select parameters and generate a list of high book value stocks.
3. Place a ‘Buy’ Order on the top high book value Indian stocks that align with your investment thesis.

• Book Value: It reflects a company’s net assets based on accounting data (assets minus liabilities). It further provides a stable, historical perspective on its intrinsic worth.
• Market Value: It represents the current stock price multiplied by outstanding shares. Along with this, it captures investor sentiment and future growth expectations, making it highly dynamic and volatile.

Here’s the formula:

Book Value Per Share = Total Shareholders’ Equity − Preferred Equity / Total Outstanding Shares

Example:

ABC Ltd. has ₹1,200 cr. assets, ₹500 cr. liabilities, ₹100 cr. preferred equity, and 200 mn shares.

Let’s find out total equity first. For that:

Total Equity = 1,200 − 500 − 100 = ₹600 cr.

Now, book value per share would be:

Book Value Per Share = 600 cr. / 200 mn = ₹3.00 per share

Suppose, if the market price is ₹2.10, the Price-to-Book ratio will be:

Price-to-Book ratio = 2.10 / 3.00 = 0.70

This means the stock trades at 70% of its net asset value.

• Margin of Safety through Tangible Assets: A strong asset base offers financial support during sharp market corrections. Whereas tangible assets like property or equipment help preserve shareholder value even in extended recessions.
• Potential for Market Re-Rating: Stocks trading below intrinsic net asset value often attract renewed investor interest. This is because shifting market sentiment can drive P/B ratios back toward historical norms, unlocking latent capital appreciation tied to tangible book value.
• Downside Support During Market Corrections: During broad equity sell-offs, firms that are below book value tend to retain relative valuation support. This is because net tangible assets help reduce the risk of permanent capital loss, unlike asset-light peers with weaker balance sheets.

• Possibility of Value Traps: Persistently low P/B ratios can indicate unresolved business or industry challenges. Moreover, these issues may turn seemingly undervalued stocks into value traps with prolonged underperformance and subdued valuations.
• Book Value Limits in Low-Asset Firms: In sectors like technology or services, most value comes from intangible assets like intellectual property or brand, not physical assets. So, using book value alone may not reflect a company’s real worth.
• Lag of Book Value Figures: Infrequent asset revaluations and delayed impairment recognition can render book value less reflective. It may lead to misrepresenting current net worth when accounting adjustments fail to capture rapid deterioration in asset quality.

• Industry-Specific Capital Intensity: It influences typical P/B levels, with manufacturing or utilities often trading lower than asset-light industries, underscoring the necessity of contextual peer comparisons.
• Tangible vs. Intangible Asset Composition: The balance between tangible and intangible assets influences the credibility of the liquidation value. It is because physical assets provide measurable recoupment potential, whereas intangible items may lack clear resale markets.
• Impact of Leverage and Debt Levels: High leverage reduces net asset support, as debt obligations dilute shareholder equity and raise default risk. This limits the downside protection typically offered by book value during market stress.
• Return on Equity Consistency: Consistency of return on equity relative to book value reflects management’s ability to generate earnings from net assets, with volatility indicating potential weaknesses in deploying capital.