Indian large-caps ICICI, Axis, Wipro trade at peer valuation discounts
Three of India's largest companies are trading at unusually low price-to-earnings multiples relative to peers, highlighting a divergence between market sentiment and underlying fundamentals.
ICICI Prudential Life, Axis Bank and Wipro are currently trading at the lowest price-to-earnings multiples among their respective private-sector peer groups in India. For market professionals, these valuation gaps suggest investors are pricing in near-term headwinds that may not reflect the actual operational health of the businesses.
Insurance sector pressures
ICICI Prudential Life's valuation compression stems directly from Prudential plc's plan to reduce its stake below 10%. The move is a regulatory necessity following Prudential's acquisition of a 75% stake in Bharti Life Insurance, which prevents the UK firm from holding significant stakes in multiple Indian life insurers.
The sell-off masks strong operational metrics. The insurer reported value of new business of ₹26.29 billion in FY26, a 10.9% year-on-year increase, while its VNB margin expanded to 24.7% from 22.8%. Net profit grew 34.6% to ₹16 billion. ICICI Bank has stated it will retain its majority stake and continue supporting the venture.
Banking resilience
Axis Bank carries the lowest P/E multiple among its private-sector peers despite demonstrating robust credit growth and improving asset quality. Total advances grew 19% year-on-year, led by a 38% surge in wholesale lending and 24% growth in SME advances.
Gross non-performing assets fell to 1.23%, down 17 basis points quarter-on-quarter, and net credit cost declined 39 basis points quarter-on-quarter to 0.37%. Management has indicated it is monitoring macroeconomic and geopolitical uncertainties, inflation and funding costs, but remains confident in outpacing industry growth through a disciplined approach.
Tech pivot
Wipro's discount reflects market expectations of slower revenue growth compared to rivals. IT services revenue was essentially flat at $2.65 billion in Q4FY26, down 0.2% year-on-year, while operating margins contracted 30 basis points sequentially to 17.3%.
However, the stock offers a 6.27% dividend yield. The company is attempting to close the growth gap by launching a dedicated AI-native business unit. This new division aims to transition Wipro from a traditional services model to a "services-as-a-software" approach, targeting enterprise-grade agentic AI solutions.
A low valuation multiple alone does not eliminate underlying business risks. However, the current pricing of these three large-caps suggests the market is heavily discounting near-term noise—from regulatory shareholding adjustments to macroeconomic caution—against improving balance sheets and cash flows.
