Top Undervalued Indonesian Stocks to Buy in 2026: By Sector & Valuation
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| Indonesian Stocks |
Worldreview1989 - Indonesia remains one of Southeast Asia's most important equity markets, but finding genuinely undervalued stocks requires more than screening for a low price-to-earnings ratio.
For U.S. investors, Indonesian equities can provide exposure to a large domestic consumer economy, banking growth, infrastructure investment, commodities, telecommunications, healthcare, and the country's long-term industrialization strategy.
The challenge is separating cheap stocks from good businesses temporarily priced below their intrinsic value.
In this 2026 guide, we screen several large Indonesian companies using a combination of:
Price-to-earnings (P/E)
Price-to-book value (P/B or PBV)
Return on equity (ROE)
Earnings growth
Dividend potential
Balance-sheet quality
Sector outlook
Cyclical versus structural earnings
Potential valuation re-rating
The strongest candidates for a value-oriented investor include Bank Mandiri (BMRI), Bank Negara Indonesia (BBNI), Bank Rakyat Indonesia (BBRI), Telkom Indonesia (TLKM), Astra International (ASII), Kalbe Farma (KLBF), and Bank Syariah Indonesia (BRIS).
This is an educational stock-analysis framework rather than individualized investment advice.
What Does "Undervalued" Mean in Indonesia?
A stock is not necessarily undervalued simply because its share price has fallen.
A better definition is:
A stock is potentially undervalued when the market price is materially below a reasonable estimate of its intrinsic value relative to its earnings, assets, cash flows, growth prospects and risk.
For Indonesian stocks, investors should pay particular attention to:
1. P/E Ratio
P/E compares the share price with earnings per share.
A lower P/E can indicate attractive valuation, but a low multiple may also signal:
declining earnings,
commodity-cycle risk,
weak competitive advantages,
governance concerns,
high leverage,
or structurally declining industries.
2. Price-to-Book Value
PBV is especially useful for banks.
For example, a bank trading below 1x book value can be interesting if it generates sustainable returns on equity above its cost of equity.
3. ROE
High ROE combined with a reasonable valuation is one of the strongest value-investing combinations.
A company generating 15–20% ROE should generally command a higher valuation than a business generating single-digit returns.
4. Dividend Yield
Income is particularly important for U.S. investors because Indonesian blue-chip companies can offer relatively attractive dividend yields.
However, investors should calculate dividend yield using the actual dividend rather than assuming that a high historical payout will continue indefinitely.
Indonesia's 2026 Macro Backdrop
The investment case for Indonesian equities begins with the country's domestic economy.
Bank Indonesia projected Indonesia's 2026 economic growth in a range of approximately 4.9%–5.7%, while maintaining an inflation target of 2.5% ±1%.
This is important because many Indonesian companies are driven by domestic consumption, credit growth, infrastructure investment and household purchasing power.
For foreign investors, however, the Indonesian rupiah remains an important variable.
A U.S.-based investor can be correct about an Indonesian company and still experience disappointing USD returns if the rupiah depreciates significantly against the dollar.
That makes valuation discipline particularly important.
Best Undervalued Indonesian Stocks for 2026
| Stock | Sector | Sept. 4, 2026 Reference Price | Main Valuation Case | Risk Level |
|---|---|---|---|---|
| BMRI | Banking | ~Rp4,420 | Strong earnings + reasonable bank valuation | Medium |
| BBNI | Banking | ~Rp3,940 | Low P/E/PBV + improving asset quality | Medium |
| BBRI | Banking | ~Rp3,390 | Scale + MSME exposure + dividend | Medium |
| TLKM | Telecommunications | ~Rp2,610 | Cash generation + dividend + asset value | Medium |
| ASII | Conglomerate/Auto | ~Rp4,900 | Discount to book + diversified earnings | Medium |
| KLBF | Healthcare | ~Rp775 | Defensive growth + improving earnings | Low-Medium |
| BRIS | Islamic Banking | ~Rp1,790 | Structural Islamic-finance growth | Medium-High |
The September 4 market prices are reference points, not permanent valuations. For example, BBRI closed around Rp3,390, BMRI around Rp4,420, BBNI around Rp3,940, TLKM around Rp2,610, ASII around Rp4,900 and BRIS around Rp1,790.
1. Bank Mandiri (BMRI)
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| Bank Mandiri (BMRI) |
Best For: Large-Cap Banking Value
Bank Mandiri is arguably one of the most interesting Indonesian banking stocks for investors seeking a combination of growth, profitability and dividends.
The bank reported 2025 consolidated net income of approximately Rp56.3 trillion, while total assets reached Rp2,829.9 trillion, an increase of 16.6% year over year. Consolidated loans grew 13.4% to approximately Rp1,895 trillion.
That gives BMRI a substantial earnings base.
Why BMRI May Be Undervalued
The investment thesis is not based simply on a low P/E.
The bigger argument is:
Strong earnings + balance-sheet scale + credit growth + digitalization + potential monetary easing = potential multiple expansion.
At approximately Rp4,420 on September 4, 2026, BMRI was still being followed closely by institutional investors. MNC Sekuritas recently cited a technical buy-on-weakness range around Rp4,390–Rp4,430, while another market source listed a Rp5,150 target from KGI/Kay Hian coverage.
Key Catalysts
Loan growth
Lower funding costs
Improving credit quality
Digital banking
Government-linked infrastructure financing
Dividend distributions
Foreign investor participation
Main Risk
Banks are highly sensitive to:
interest rates,
credit costs,
economic growth,
regulatory policy,
and the rupiah.
Verdict
Valuation: Attractive
Quality: High
Income potential: High
2026 profile: Core value holding
2. Bank Negara Indonesia (BBNI)
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| Bank Negara Indonesia (BBNI) |
Best For: Deep-Value Banking
BBNI may be one of the more interesting choices for investors specifically looking for valuation discounts.
At September 4, 2026, BBNI traded around Rp3,940, with a reported P/E of approximately 7.1x and PBV around 0.89x in one current market-data source.
Those numbers are attractive if the bank can sustain double-digit returns on equity and maintain asset quality.
BNI reported approximately Rp20.0 trillion in 2025 attributable net income. Its 2025 credit growth reached 15.9%, while gross NPL declined to 1.9%. ROAE was approximately 12.7%.
Why BBNI Is Interesting
The valuation argument is straightforward:
Low P/E + below/around 1x book value + improving asset quality + credit growth.
The market may be assigning a discount because BNI's ROE is below some larger Indonesian banking peers.
But that also creates potential upside if profitability improves.
Potential Catalysts
Higher ROE
Lower credit costs
Corporate lending growth
Digital banking
Stronger CASA
Higher dividend payout
BNI's 2025 CASA ratio remained close to 70%, while total CAR stood at 20.7%, providing a solid capital buffer.
Main Risk
The biggest issue is that a cheap bank can remain cheap.
If ROE does not improve, investors may continue assigning BBNI a discount multiple.
Verdict
Valuation: Very attractive
Growth: Moderate-High
Dividend potential: High
2026 profile: Deep-value banking candidate
3. Bank Rakyat Indonesia (BBRI)
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| Bank Rakyat Indonesia (BBRI) |
Best For: Dividend + MSME Exposure
BBRI is one of Indonesia's most important financial institutions because of its enormous exposure to micro, small and medium-sized businesses.
On September 4, 2026, BBRI closed at approximately Rp3,390.
Foreign investors have also shown renewed interest. Data reported for September 1 showed BBRI receiving approximately Rp838 billion of net foreign buying, the highest among stocks listed in that session.
Why BBRI Is Attractive
BBRI's competitive advantage comes from scale.
Its ecosystem includes:
microfinance,
SME lending,
consumer banking,
digital banking,
payments,
and an enormous customer base.
For long-term investors, this creates a potentially powerful compounding model.
The Valuation Argument
BBRI should not necessarily be valued like a high-growth technology stock.
Its attractiveness comes from:
large earnings + dividend capacity + dominant franchise + long-term Indonesian financial inclusion.
The stock can become particularly interesting when market sentiment pushes its valuation toward historically lower ranges.
Risks
The biggest risk is credit quality.
Micro and SME borrowers can be more vulnerable to:
food inflation,
commodity downturns,
weaker consumer demand,
higher funding costs.
Verdict
Valuation: Attractive
Business quality: High
Dividend: High
2026 profile: Long-term banking compounder
4. Telkom Indonesia (TLKM)
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| Telkom Indonesia (TLKM) |
Best For: Defensive Value + Dividend
Telkom Indonesia offers a completely different investment proposition.
Instead of relying primarily on loan growth, TLKM provides exposure to:
telecommunications,
broadband,
fiber infrastructure,
enterprise connectivity,
data centers,
digital infrastructure,
and other technology-related assets.
Telkom reported 2025 revenue of Rp146.7 trillion and EBITDA of Rp72.2 trillion. However, attributable net income declined to approximately Rp17.8 trillion.
The company explained that accelerated depreciation associated with its transformation affected reported net income.
That distinction matters.
Why TLKM May Be Undervalued
Telkom's investment thesis is increasingly based on the potential value of its infrastructure assets.
The company is pursuing transformation initiatives including fiber-related value unlocking.
At approximately Rp2,610 on September 4, 2026, TLKM remained substantially below its previous 52-week high according to market data.
Financial Strength
2025:
Revenue: Rp146.7 trillion
EBITDA: Rp72.2 trillion
Attributable net income: Rp17.8 trillion
ROE: 16.25%
Debt/EBITDA: approximately 1.04x
Telkom also reported a 2025 total shareholder return of 35.7%, including capital appreciation and dividends.
Why U.S. Investors May Like TLKM
TLKM provides exposure to Indonesia's digital infrastructure growth without requiring investors to buy a highly speculative technology stock.
Risks
intense telecom competition,
pricing pressure,
high capital expenditure,
regulatory risk,
execution risk from transformation.
Verdict
Valuation: Attractive
Dividend: Attractive
Business quality: High
2026 profile: Defensive value + infrastructure optionality
5. Astra International (ASII)
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| Astra International (ASII) |
Best For: Conglomerate Value
Astra International is one of Indonesia's most diversified listed companies.
Its businesses include:
automotive,
heavy equipment,
mining,
financial services,
infrastructure,
logistics,
agribusiness,
and other investments.
This diversification is exactly why ASII can sometimes trade below what investors might consider the sum-of-the-parts value of its businesses.
Astra reported 2025 revenue of approximately Rp323.4 trillion and net income attributable to shareholders of Rp32.8 trillion, down 3% year over year. Net asset value per share increased 8% to Rp5,692.
At around Rp4,900 on September 4, 2026, the stock was trading below that reported year-end 2025 book value per share. A September market analysis also placed its P/E at approximately 6.6x based on trailing earnings.
Why ASII Is Interesting
This is a classic value-investing setup:
high-quality diversified company + strong balance sheet + low earnings multiple + price below book value.
What Could Unlock Value?
Several things:
Recovery in automotive demand
Better commodity prices
Higher contribution from financial services
Gold and mining exposure
Capital allocation
Share buybacks
Strategic portfolio changes
Astra completed another tranche of its share buyback program in 2025 and proposed a final dividend of Rp292 per share.
Main Risk
Astra remains exposed to cyclical businesses.
Lower:
coal prices,
vehicle sales,
heavy equipment demand,
can reduce earnings.
Verdict
Valuation: Very attractive
Balance sheet: Strong
Dividend: Attractive
2026 profile: One of the strongest Indonesian value plays
6. Kalbe Farma (KLBF)
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| Kalbe Farma (KLBF) |
Best For: Defensive Healthcare Growth
For investors who want lower cyclicality, Kalbe Farma deserves attention.
Healthcare is structurally different from mining, banking and automotive businesses because demand for medicines and healthcare products is less dependent on the commodity cycle.
Kalbe reported 2025 net sales growth of 8.3% and net profit growth of 13.1% to approximately Rp3.7 trillion.
The company therefore entered 2026 with improving earnings momentum.
At around Rp775 on September 4, 2026, KLBF had also experienced significant valuation compression compared with periods when the stock commanded a premium defensive multiple.
Why KLBF May Be Undervalued
The potential attraction is:
defensive business + earnings growth + healthcare demand + relatively predictable cash generation.
For U.S. investors, KLBF can function as a portfolio diversifier against more cyclical Indonesian holdings.
Risks
pharmaceutical regulation,
raw-material costs,
currency fluctuations,
competition,
consumer purchasing power.
Verdict
Valuation: Attractive
Defensive quality: High
Growth: Moderate
2026 profile: Defensive value
7. Bank Syariah Indonesia (BRIS)
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| Bank Syariah Indonesia (BRIS) |
Best For: Long-Term Islamic Finance Growth
BRIS is more speculative than BMRI, BBRI or BBNI, but its long-term growth story is compelling.
Bank Syariah Indonesia reported 2025 net income of approximately Rp7.57 trillion, up 8.02% year over year. Financing increased 14.49% to approximately Rp319 trillion, while gross NPF improved to 1.81%.
The bank also reported significant growth in gold financing, which increased 78.6% year over year to approximately Rp22.9 trillion.
BRIS paid a 2025 dividend equivalent to 20% of net profit, or approximately Rp1.51 trillion.
Why BRIS Is Interesting
Indonesia has one of the world's largest Muslim populations, creating a potentially significant long-term market for:
Islamic banking,
Sharia investment,
halal finance,
gold products,
digital banking,
and Islamic wealth management.
The Problem
Growth stocks can be expensive.
At approximately Rp1,790 on September 4, 2026, BRIS was below some independent fair-value estimates, but investors should not treat those estimates as intrinsic truth.
The more important question is whether BRIS can continue increasing ROE while maintaining asset quality.
Verdict
Valuation: Attractive but growth-dependent
Growth: High
Risk: Higher
2026 profile: Long-term growth/value hybrid
Sector-by-Sector Ranking
Banking
1. BBNI
Best pure valuation.
2. BMRI
Best combination of quality and growth.
3. BBRI
Best long-term franchise and dividend candidate.
4. BRIS
Best structural Islamic-finance growth story, but higher valuation risk.
Telecommunications
1. TLKM
Telkom is the standout large-cap value candidate because of its infrastructure assets, cash generation and dividend potential.
Conglomerates
1. ASII
Astra is particularly interesting for investors who like sum-of-the-parts valuation.
Healthcare
1. KLBF
Kalbe offers a more defensive earnings profile than commodity and banking stocks.
My 2026 Value Ranking
If the objective is risk-adjusted value rather than simply buying the cheapest stock, my ranking would be:
| Rank | Stock | Investment Style | Conviction |
|---|---|---|---|
| 1 | BMRI | Quality value + dividend | ⭐⭐⭐⭐⭐ |
| 2 | ASII | Deep value + diversified assets | ⭐⭐⭐⭐⭐ |
| 3 | BBNI | Deep-value banking | ⭐⭐⭐⭐½ |
| 4 | BBRI | Long-term banking compounder | ⭐⭐⭐⭐½ |
| 5 | TLKM | Defensive infrastructure value | ⭐⭐⭐⭐ |
| 6 | KLBF | Defensive healthcare | ⭐⭐⭐⭐ |
| 7 | BRIS | Growth + Islamic finance | ⭐⭐⭐½ |
How I Would Build a Diversified Indonesian Value Portfolio
A U.S. investor should generally avoid treating these stocks as seven independent bets.
A hypothetical value-oriented portfolio could instead be structured around sectors:
Banking — 40%
BMRI: 15%
BBRI: 12%
BBNI: 8%
BRIS: 5%
Telecommunications — 20%
TLKM: 20%
Conglomerates — 20%
ASII: 20%
Healthcare — 15%
KLBF: 15%
Cash / Opportunistic — 5%
This is an illustrative allocation, not a personalized recommendation.
The advantage is diversification across different economic drivers.
What U.S. Investors Should Watch
Investors buying Indonesian stocks through an international broker should consider risks that do not exist to the same degree when buying U.S. companies.
1. Currency Risk
If the rupiah weakens against the U.S. dollar, an Indonesian stock can rise in IDR terms but generate a smaller return in USD.
For example:
If an Indonesian stock rises 10% but the rupiah falls 8% against the dollar, the investor's approximate USD return would be substantially lower.
2. Foreign Ownership Rules
Some Indonesian industries have foreign ownership restrictions.
Investors should verify eligibility and ownership limits before investing.
3. Political Risk
State-owned banks and infrastructure companies can be influenced by government policy.
That does not automatically make them bad investments, but it needs to be included in the valuation.
4. Commodity Exposure
Stocks such as ASII and UNTR can be affected by:
coal prices,
gold prices,
heavy-equipment demand,
mining activity,
and weather conditions.
United Tractors, for example, reported 2025 revenue of Rp131.3 trillion and net income of Rp14.8 trillion, with earnings pressured by lower coal prices and mining-contracting issues, while gold mining provided an offset.
This illustrates why commodity stocks should be valued through a cycle rather than using one year's earnings.
The Most Important Valuation Rule
One of the biggest mistakes investors make is confusing:
Low P/E = cheap
with:
Low P/E + sustainable earnings + strong balance sheet + attractive ROE = potentially undervalued.
That distinction is critical.
Consider two hypothetical companies:
Company A
P/E: 5x
ROE: 5%
Debt: high
Earnings: declining
Company B
P/E: 8x
ROE: 18%
Debt: manageable
Earnings: growing
Company B may actually be the cheaper investment despite having the higher P/E.
What Could Drive Indonesian Stocks Higher in 2026–2027?
Several macro trends could create a favorable environment.
Domestic Consumption
Indonesia's large population supports structural consumer growth.
Credit Expansion
Bank Indonesia's policy framework continues to support economic growth and credit transmission. BI has projected 2026 economic growth of 4.9%–5.7%.
Infrastructure
Indonesia continues to invest in transportation, energy, telecommunications and downstream industries.
Digitalization
Banks and telecom companies can benefit from increasing digital transactions and data usage.
Commodity Downstreaming
Indonesia continues to push greater domestic processing of natural resources.
Foreign Investor Re-entry
Foreign investors have recently returned to major Indonesian equities. During August 31–September 4, 2026, foreign investors recorded approximately Rp2.3 trillion of net buying while the Jakarta Composite Index gained 1.82%.
That does not guarantee further gains, but it suggests international positioning is an important factor to monitor.
The Biggest Risks to the Thesis
Even the strongest undervalued stock can remain cheap for years.
The principal risks for Indonesian equities include:
Rupiah depreciation
Higher global interest rates
U.S. dollar strength
Commodity-price declines
Geopolitical instability
Foreign capital outflows
Banking credit deterioration
Regulatory changes
Political intervention
Weak domestic consumption
Bank Indonesia has also highlighted elevated global uncertainty and geopolitical risks in its 2026 policy communications.
Final Verdict: Best Undervalued Indonesian Stocks in 2026
For investors approaching Indonesia from a U.S. value-investing perspective, the most attractive opportunities are not necessarily the most speculative stocks.
The stronger strategy is to concentrate on companies where valuation and business quality overlap.
Best Overall
BMRI — Bank Mandiri
The best balance between scale, profitability, credit growth and shareholder returns.
Best Deep Value
BBNI — Bank Negara Indonesia
The low P/E and sub-1x PBV profile make it particularly interesting if ROE improves.
Best Diversified Value
ASII — Astra International
A diversified conglomerate trading at a potentially attractive discount to underlying asset value.
Best Defensive Value
TLKM — Telkom Indonesia
A combination of telecommunications infrastructure, cash generation and dividend potential.
Best Long-Term Banking Franchise
BBRI — Bank Rakyat Indonesia
A powerful exposure to Indonesia's micro and SME economy.
Best Defensive Healthcare Stock
KLBF — Kalbe Farma
A potentially attractive way to obtain Indonesian healthcare exposure without taking commodity-cycle risk.
Best Structural Growth Opportunity
BRIS — Bank Syariah Indonesia
Higher risk, but potentially significant long-term growth from Indonesia's expanding Islamic-finance ecosystem.
Bottom Line
The Indonesian stock market in 2026 offers something increasingly valuable for international investors: large, established companies that can trade at valuations considerably below comparable growth businesses in developed markets.
But investors should not buy simply because a stock looks cheap.
The strongest opportunities are companies with:
reasonable valuation + sustainable ROE + healthy balance sheets + durable competitive advantages + growing cash flow + shareholder distributions.
Using that framework, BMRI, ASII, BBNI, BBRI and TLKM stand out as the strongest large-cap value candidates, while KLBF and BRIS provide useful defensive and structural-growth diversification.
For U.S. investors, the final decision should also incorporate USD/IDR currency exposure, taxation, broker access, liquidity, foreign-ownership rules and the investor's own risk tolerance.
About the Author
David Mulyana is the founder and editor of WorldReview1989, an independent publication dedicated to finance, investing, insurance, business, technology, and digital marketing.
He researches and writes in-depth articles that help readers understand complex financial topics through clear explanations, practical insights, and data-driven analysis. His editorial focus includes stock market investing, cryptocurrencies, banking, personal finance, business insurance, real estate, startup strategies, and emerging technology trends.
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About WorldReview1989
WorldReview1989 provides educational content for readers seeking reliable information about finance, investment opportunities, insurance, business strategies, and technology. The website aims to simplify complex financial concepts and empower readers to make informed decisions.
Disclaimer: The information published on WorldReview1989 is for educational and informational purposes only. It should not be considered financial, legal, tax, or investment advice. Readers should consult qualified professionals before making financial decisions.
David Mulyana writes about stocks, financial markets, investment strategies, insurance and emerging-market opportunities, with a focus on helping readers understand financial data and investment risks
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