Fundamentally strong companies are those with a good financial base, such as those with a high return on equity, strong earnings growth, low debt-to-equity ratios, and significant net profit growth. Listed below are two fundamentally strong stocks with a buy rating of more than 15%.
Affle Industries Ltd
Affle (India) Limited offers a consumer intelligence platform that creates consumer suggestions and conversions through relevant mobile advertising.
The company has a market capitalisation of Rs. 14,216, making it a small-cap. On Friday shares of the company were trading 1.29% down at Rs. 1,066.
The total revenue of the company rose by 29% YoY from Rs. 1,153.3 in FY22 to Rs. 1,488.3 Cr in FY23, with a three-year CAGR of 63.6%. For the same period net profit grew by 14% YoY from Rs. 213.9 to Rs. 244.6, with a three-year CAGR of 55.1%.
As of March 2023, the company’s ROE is 16.69%, ROA is 12.16%, the net profit margin is 17.16% and the debt-to-equity ratio is 0.1.
Sharekhan has given a buy rating on the stock with a target price of 1270 which is a 17.1% upside from the current trading price.
As per the latest shareholding data Promoters hold 59.89%, FIIs hold 9.97%, DIIs hold 13.57% and Public & others hold 16.57% stake in this company.
PI Industries Ltd
Agrochemicals are produced and supplied by PI Industries Ltd (PI Industries). Insecticides, fungicides, herbicides, speciality goods, plant nutrients, and other plant fertilizers are among the many things it sells.
The company belongs to a large-cap, with a market capitalisation of Rs. 57,228 Cr. On Friday shares of the company were trading 1.55% down at Rs. 3,772 and 6.3% away from the 52-week high.
The total revenue of the company increased by 23.1% YoY from Rs. 5,400.9 Cr in FY 22 to Rs. 6,651 Cr in FY 23, with a three-year CAGR of 24.9%. For the same period net profit grew by 46% YoY from Rs. 843.8 Cr to Rs. 1,229.5 Cr.
As of March 2023, the company’s ROE is 17.07%, ROA is 14.49%, the net profit margin is 18.83% and it’s a debt-free company.
Motilal Oswal has given a buy rating on this stock with a target price of Rs. 4560 which is a 20% upside from the current trading price.
As per the latest shareholding data, Promoters hold 46.09%, FIIs hold 19.17%, DIIs hold 23.96% and Public & others hold a 10.78% stake in this company.
Written by Sheshadri N
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