Companies with a “fundamentally strong” nature portray specific set of characteristics, viz, strong and consistent financials, improving margins, low leverage ratios, and many more.
Listed below are two fundamentally strong stocks with a potential upside of up to 30 percent to add to your watchlist:
Coromandel International Limited
Coromandel International Limited is engaged in the business of manufacturing as well as selling fertilizers and crop protection chemicals. Some of the main products in the company’s portfolio include single super phosphate fertilizers, organic manure, etc.
With a market capitalization of Rs 30,200 crores, the company’s stock is currently trading at Rs 1,026 slipping around 1.70 percent as compared to the previous closing levels of Rs 1,043.40 apiece.
During recent quarters, the company reported growth in operating revenues as well as net profits with the former increasing from Rs 5,475 crores during Q4FY22-23 to Rs 5,693 crores during Q1FY23-24, and, the latter moving from Rs 263 crores to Rs 497 crores.
Prabhudas Lilladhar gave a “Buy” recommendation for the stock with a target price of Rs 1,330 indicating an upside of around 30 percent as compared to the stock price levels prevailing in the market.
The rationale behind providing such a recommendation is pertaining to decent growth in financials amid challenging environment, strong capex plans, business segments gaining traction, new product launches, and many more.
Bajaj Finance Limited
Bajaj Finance Limited, the holding company for various financial services businesses under the Bajaj Group, serves a wide range of customers by way of providing solutions for asset acquisition through financing.
With a market capitalization of Rs 4.35 Lakh crores, the company’s stock is currently trading at Rs 7,182 slipping around 1.20 percent as compared to the previous closing levels of Rs 7,269.70 apiece.
During recent quarters, the company reported growth in operating revenues as well as net profits with the former increasing from Rs 11,359 crores during Q4FY22-23 to Rs 12,497 crores during Q1FY23-24, and, the latter moving from Rs 3,156 crores to Rs 3,434 crores.
Axis Direct gave a “Buy” recommendation for the stock with a target price of Rs 8,800 indicating an upside of around 23 percent as compared to the stock price levels prevailing in the market.
The rationale behind providing such a recommendation is pertaining to the growth in the loan book, steady return on asset (RoA) ratios, marginal improvements in asset quality, and many more.
Written by Amit Madnani
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