A company is said to be ‘fundamentally strong’ when it portrays a certain set of characteristics such as strong and consistent financial performance, lower leverage ratios, etc.
Listed below is one such fundamentally strong stock under Rs 300 that one should add to their watchlist:
With a market capitalization of Rs 6,986.70 crores, the stocks of HBL Power Systems Limited opened their trading hour on Wednesday at Rs 253.80 and currently trade at Rs 252.05, slipping around 1.50 percent as compared to the previous closing levels of Rs 255.70.
Having a quick walkthrough of the consolidated financials reported by the company, the fundamental business parameters such as the operating revenues as well as after-tax profits increased consistently during the past couple of quarters.
The most recent movement in the operating revenues showed a shift from Rs 402.61 crores during Q4FY22-23 to Rs 467.44 crores during Q1FY23-24. In congruence with the pattern, the after-tax profits increased from Rs 34.94 crores to Rs 51.51 crores during the same time period.
In addition to the above, the profitability ratios of the company were reported at decent numbers with the return on equity (RoE) reported at 10.83 percent during FY22-23 and the return on capital employed (RoCE) reported at 14.02 percent. The net profit margin of the company was reported at 7.19 percent.
Coming onto the leverage ratios, the debt-to-equity ratio, one of the most popular metrics for decision-making purposes, though increased YoY, has stayed within the desired limits and was reported at 0.08 times during FY22-23. Moreover, the interest coverage ratio of the company rose from 17.37 times during FY21-22 to 20.83 times during FY22-23.
According to the shareholding pattern data released, the company’s Promoters hold a 59.1 percent stake, and the Foreign Institutional Investors (FIIs), drastically increasing their stake in the June 2023 quarter, hold a 2.63 percent stake in the company.
HBL Power Systems Limited is engaged in the business of designing, developing, and manufacturing different types of batteries including Lead acid, silver zinc, lithium, railway and defence electronics, and many other products. The company has its presence globally covering regions in America, the Middle East, and Europe. It generates most of its revenue from the ‘batteries’ segment within India.
Written by Amit Madnani
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