Companies with a strong financial foundation, such as those with a high return on equity, good earnings growth, low debt-to-equity ratios and good net profit growth, are considered to be fundamentally strong companies. Listed below are two such fundamentally strong stocks under the mid-cap category which are engaged in the IT sector:
KPIT Technologies Ltd
KPIT Technologies works closely with the worldwide automotive and transportation ecosystem. In order to advance mobility toward a clean, smart, and secure future, it serves as a premier independent software development and integration partner.
The company has a market valuation of Rs. 31,440 Crore, which places it in the mid-cap category. The fundamentals of this are strong, and it generated multi-bagger returns of 116% in just one year. On Monday, this company’s shares increase 0.13% trading at Rs. 1147.75.
The stock has returned 48% in six months and 114% in a single year to investors. The company’s ROE is 23.06% as of Mar-23, with a three-year CAGR of 18.1%. its ROA is 11.20%, with a three-year CAGR of 7.7%. Revenues increased by 38% year on year from Rs. 2,477.19 Cr in FY22 to Rs. 3,405.23 Cr in FY23, Net profit increased by 40% year on year from Rs. 276.2 Cr in FY22 to Rs.386.8 Cr In FY23 and the company’s EPS is 15.67. It’s a debt-free company.
As of June 2023, Promotors hold 39.47%, The public holds 22.8%, FIIs hold 25.9% and DIIs hold an 11.78% stake in this company.
Coforge Ltd
Coforge Ltd (Coforge), originally NIIT Technologies Ltd, is an information technology business that is a part of Hulst BV. Digital services, AI, data and insights, digital process automation, cloud and infrastructure management services, cybersecurity, advanced application engineering services, business process services (BPS), and sap services are among the company’s service offerings.
The company belongs to a mid-cap company with a market capitalisation of Rs. 30,000 crores. On Monday, Company’s shares increase 0.45% trading at Rs. 4,910.30.
The stock has given 13% returns in 6 months and 24% returns in one year. The company’s ROCE is 27.48% as of Mar-23, with a three-year CAGR of 5.6%. Its ROE is 22.50% as of Mar-23, with a three-year CAGR of 6.7%. Revenue grew by 24.6% YoY from Rs. 6,483.8 Cr in FY22 to Rs. 8,076.5 Cr in FY23, Net profit increased by 4.25% YoY from Rs. 714.7 Cr in FY22 to Rs. 745.1 Cr in FY23 and the company’s EPS 116.11. Debt-equity ratio 0.1% as of Mar-23.
As of June 2023, Promoters hold 26.63%, The public hold 11.39%, FIIs hold 24.78% and DIIs hold 37.20% stake in this company.
Written by Sheshadri N
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