Synopsis: The shares of these fundamentally strong companies are trading up to 38 percent below their 52-week highs while offering healthy returns on capital and meaningful upside based on brokerage target prices.
A sharp correction in a quality stock does not always reflect weakening business fundamentals. Many fundamentally strong companies with healthy profitability, low debt, and consistent earnings have corrected from their recent highs, giving investors a chance to accumulate quality businesses at relatively better valuations with potential for long-term wealth creation.
For investors looking for fundamentally strong companies, metrics such as high ROCE, strong ROE, low debt, and healthy earnings growth are important indicators. Here are five fundamentally strong stocks trading at a discount of up to 38 percent from their 52-week highs, while also offering meaningful upside based on brokerage target prices. Here are the stocks at a discount with good fundamentals
Waaree Energies Ltd
Waaree Energies Ltd is India’s largest solar PV module manufacturer with a strong presence across the solar value chain. The company manufactures solar modules, solar cells, and offers EPC services along with renewable energy solutions. It serves customers in India and several international markets.
With a market capitalization of Rs 82,124 crore, the shares of the company were last trading at Rs 2,855 per share, around 26.1 percent below their 52-week high. The company has a ROCE of 38.8 percent and ROE of 32.8 percent, while maintaining a low debt-to-equity ratio of 0.22, reflecting strong fundamentals. Motilal Oswal has assigned a target price of Rs 3,825, implying an upside potential of 34.1 percent from the current market price.
BSE Ltd
BSE Ltd is one of India’s leading stock exchanges, offering a platform for trading in equities, debt instruments, mutual funds, derivatives, and commodities. The company also provides market data, clearing, settlement, and other capital market services to investors and market participants.
With a market capitalization of Rs 1,50,782 crore, the shares of the company were last trading at Rs 3,702 per share, around 16.8 percent below their 52-week high. The company has a ROCE of 58 percent and ROE of 44.8 percent, while maintaining a debt-free balance sheet, reflecting strong fundamentals. Prabudas Liladhar Brokerage has assigned a target price of Rs 4,850, implying an upside potential of 31.8 percent from the current market price.
Dixon Technologies (India) Ltd
Dixon Technologies (India) Ltd is India’s leading electronics manufacturing services (EMS) company. It manufactures smartphones, televisions, consumer appliances, lighting products, wearables, telecom equipment, and IT hardware for several global and domestic brands under long-term manufacturing partnerships.
With a market capitalization of Rs 80,922 crore, the shares of the company were last trading at Rs 13,235 per share, around 28.4 percent below their 52-week high. The company has a ROCE of 42 percent and ROE of 37.4 percent, while maintaining a low debt-to-equity ratio of 0.21, reflecting strong fundamentals. Investec has assigned a target price of Rs 16,200, implying an upside potential of 22.4 percent from the current market price.
IRCTC Ltd
Indian Railway Catering and Tourism Corporation is a Government-owned company that provides online railway ticket booking, catering, packaged drinking water, tourism, and hospitality services for Indian Railways. It also operates executive train services and plays a key role in the country’s railway travel ecosystem.
With a market capitalization of Rs 40,076 crore, the shares of the company were last trading at Rs 501 per share, around 37.3 percent below their 52-week high. The company has a ROCE of 46.1 percent and ROE of 34.6 percent, while maintaining a low debt-to-equity ratio of 0.02, reflecting strong fundamentals. Prabudas Liladhar has assigned a target price of Rs 712, implying an upside potential of 42.3 percent from the current market price.
Coforge Ltd
Coforge Ltd is a global information technology services company that provides digital transformation, cloud, data analytics, artificial intelligence, and engineering solutions. It primarily serves clients across banking, insurance, travel, transportation, and healthcare, with operations spanning multiple countries.
With a market capitalization of Rs 63,464 crore, the shares of the company were last trading at Rs 1,476 per share, around 26 percent below their 52-week high. The company has a ROCE of 23.5 percent and ROE of 20.6 percent, while maintaining a low debt-to-equity ratio of 0.08, reflecting strong fundamentals. Prabudas Liladhar has assigned a target price of Rs 2,020, implying an upside potential of 37.8 percent from the current market price.
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