A company of a ‘fundamentally strong’ nature portrays a certain set of characteristics such as strong and consistent financials, strong profitability ratios, lower leverage ratios, and many more.
Listed below are four fundamentally strong stocks from the top 4 booming sectors in India that one should add to their watchlist:
Clean Science & Technology Limited – Chemical sector
With a market capitalization of Rs 15,038.26 crores, the stocks of Clean Science & Technology Limited started their trading session on Wednesday at Rs 1,401.05 and currently trade at Rs 1,415.40, gaining around 0.50 percent as compared to the previous closing levels of Rs 1,408.20.
Having a look at the financials, the company, on a YoY basis, has been successful in consistently increasing its prime business indicators such as the operating revenues and net profits.
The operating revenues rose from Rs 684 crores during FY21-22 to Rs 935 crores during FY22-23, and, the net profits moved from Rs 228 crores to Rs 303 crores keeping the timeframe the same.
Moreover, the profitability metrics of the company stayed uniform with the return on equity (RoE) reported at levels of 30 percent and the return on capital employed (RoCE) reported at levels of 39 percent.
In addition to the above, the company has maintained a ‘nil’ debt-to-equity ratio for the past few financial years.
Sharda Motor Industries Limited – Auto Ancillary sector
With a market capitalization of Rs 2,887.98 crores, the stocks of Sharda Motor Industries Limited started their trading session on Wednesday at Rs 1082.95 and currently trade at Rs 971.35, a flat movement as compared to the previous closing levels of Rs 974.65.
Having a look at the financials, the company, on a YoY basis, has been successful in consistently increasing its prime business indicators such as the operating revenues and net profits.
The operating revenues rose from Rs 2,255 crores during FY21-22 to Rs 2,699 crores during FY22-23, and, the net profits moved from Rs 161 crores to Rs 205 crores keeping the timeframe the same.
Moreover, the profitability metrics of the company showed decent improvement with the return on equity (RoE) increasing from 26.04 percent during FY21-22 to 27.48 percent during FY22-23, and, the return on capital employed (RoCE) staying at levels of around 35 percent.
In addition to the above, the company has maintained a ‘nil’ debt-to-equity ratio for the past few financial years.
Persistent Systems Limited – Information Technology (IT) sector
With a market capitalization of Rs 43,571.47 crores, the stocks of Persistent Systems Limited started their trading session on Wednesday at Rs 5,662.05 and currently trade at Rs 5,664.15, slipping around 1.20 percent as compared to the previous closing levels of Rs 5,731.60.
Having a look at the financials, the company, on a YoY basis, has been successful in consistently increasing its prime business indicators such as the operating revenues and net profits.
The operating revenues rose from Rs 5,710 crores during FY21-22 to Rs 8,350 crores during FY22-23, and, the net profits moved from Rs 690 crores to Rs 921 crores keeping the timeframe the same.
Moreover, the profitability metrics of the company showed decent improvement with the return on equity (RoE) increasing from 20.49 percent during FY21-22 to 23.23 percent during FY22-23, and, the return on capital employed (RoCE) taking a shift from 23.44 percent to 28.27 percent.
In addition to the above, the debt-to-equity ratio, one of the most popular leverage ratios, reduced from 0.13 times to 0.11 times during the time horizon mentioned above.
Union Bank of India Limited – Banking (Public) sector
With a market capitalization of Rs 82,982.36 crores, the stocks of Union Bank of India Limited started their trading session on Wednesday at Rs 112.05 and currently trade at Rs 111.95, a flat movement as compared to the previous closing levels of Rs 112.05.
Having a look at the financials, the Bank, on a YoY basis, has been successful in consistently increasing its prime business indicators such as total income and net profits.
The total income levels rose from Rs 81,754 crores during FY21-22 to Rs 97,078 crores during FY22-23, and, the net profits moved from Rs 5,209 crores to Rs 8,430 crores keeping the timeframe the same.
Moreover, the gross as well as net non-performing assets of the Bank were reduced with the former from 11 percent to 7.53 percent and the latter taking a shift down from 3.68 percent to 1.70 percent.
In addition to the above, the Bank’s net profit margin showed decent improvement increasing from 7.63 percent during FY21-22 to 10.38 percent during FY22-23.
Written by Amit Madnani
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