The Indian stock market is at its all-time high. So, should you invest in fundamentally strong stocks now? The answer is no. But why? Because this is not a good time to enter the market. Currently, all stocks are heated up and looking for a potential correction. Experts say that the market is leaning towards overvaluation. Top indices like Sensex and Nifty 50 have reached their highest levels in 52 weeks.
In a year, Sensex jumped by 15,961 points to record an all-time high of 82,129 points, registering a staggering growth of 24.61%. Similarly, Nifty 50 grew by 5,395 points to reach its all-time high of 25,078 points, showing nearly 28% growth in a year. The growth in these indices is remarkable, but we know that the market operates in cycles and may be due for a correction after such significant gains. Many experts are predicting a short-term market correction soon.
Expert Opinion, Market Correction and Preparation for Opportunities
Experts forecast a 7-10% correction in a while (The Economic Times). This presents opportunities for investors looking to invest in quality and fundamentally strong stocks once the market cools. Soon, the internet and social media will be flooded with questions like: Where should we invest? What are the multi-bagger stocks? Which stocks can generate hefty returns? Relax! It’s important to burst the bubble—there is no such scheme that can generate multi-fold returns in the short term.
If you want to invest in quality stocks, then do thorough research. Choose a few stocks that fit your budget, set an investment goal, and ensure you thoroughly research these stocks beforehand. This way, when the market cools, you won’t make the mistake of panic buying the wrong equities.
David Dreman, a renowned American investor and author, once said: “Psychology is probably the most important factor in the market – and one that is least understood.”
This underscores the importance of staying disciplined and not letting emotions drive your investment decisions. Let’s explore the fundamentally strong stocks in India which have the potential to perform well in the coming years.
Fundamentally strong stocks in 2024
The fundamentally strong stocks in India are Easy Trip Planners Ltd, Avantel Ltd, Zomato Ltd, Jamna Auto Industries Ltd, NMDC Ltd, Indian Energy Exchange Ltd, Castrol India Ltd, IIFL Securities Ltd, Fineotex Chemical Ltd, Crompton Greaves Consumer Electricals Ltd, Eco Recycling Ltd, Waaree Renewables Technologies Ltd, Jupiter Wagons Ltd, KNR Constructions Ltd, Jindal Saw Ltd, SMC Global Securities Ltd.
Let’s explore a few facts about the Fundamentally strong stocks in 2024
Stocks with High Promoters Holdings
Promoter holdings refer to the percentage of a company’s shares owned by its founders, executives, or insiders. High promoter holdings generally indicate strong confidence in the company’s future prospects.
Benchmark:
Promoter Holdings ≥ 50%: This level suggests that promoters have significant control and a vested interest in the company’s success, which can be seen as a positive sign by investors.
Key Considerations:
Stability: High promoter holdings can lead to stable management and long-term vision.
Potential Risks: Limited public float might reduce liquidity, and concentrated ownership could pose governance risks.
Stocks with high promoter holdings often signal strong confidence in the company’s future, making them attractive for investors who prioritize stability and long-term growth. However, it is important to consider the company’s overall financial health and governance practices.
Also explore Top 20 Highest Share Prices in India: Exploring The Market Titans
Fundamentally Strong Stocks- Stocks with High Promoters Holdings
| Company | Industry | Market Cap (In ₹ Crores) 22nd August 2024 | Current Market Price (In ₹) | P/E Ratio | Promoters holdings ≥ 50 | ROE | 3-Year Return | 1-Year Return |
| Waaree Renewables Technologies Ltd | Power Generation | ₹ 15,105 | ₹ 1,450 | 91.35 | 74.46% | 63.77% | 247% | 466% |
| Eco Recycling Ltd | Waste Management | ₹ 1,841 | ₹ 954 | 87.35 | 73.35% | 26.98% | 127% | 411% |
| Easy Trip Planners Ltd | Tour, Travel Related Services | ₹ 7,051 | ₹ 39.8 | 64.30 | 64.30% | 17.05% | 15% | 1% |
| NMDC Ltd | Industrial Minerals | ₹ 65,880 | ₹ 225 | 11.19 | 60.79% | 21.71% | 25% | 82% |
| Castrol India Ltd | Chemicals & Lubricants | ₹ 26,573 | ₹ 269 | 30.15 | 51.00% | 40.72% | 28% | 86% |
| Jamna Auto Industries Ltd | Auto Ancillaries | ₹ 5,087 | ₹ 128 | 24.69 | 49.94% | 22.74% | 17% | 18% |
Data as of 22nd August, 2024. Source: Company website and others.
Stocks with a PEG Ratio less than 1
The PEG ratio (Price/Earnings to Growth ratio) is a tool investors use to evaluate a stock’s value while considering its earnings growth. It combines the P/E ratio (price-to-earnings) with the company’s expected growth rate.
Formula: PEG Ratio = P/E Ratio / Earnings Growth Rate
Benchmarks:
PEG < 1: The stock may be undervalued (a good value).
PEG = 1: The stock is fairly valued.
PEG > 1: The stock may be overvalued.
The PEG ratio helps us understand if a stock’s price is reasonable compared to its growth potential.
Explore the Profitable Stocks with Low PEG Ratios : From Value to Growth
Fundamentally Strong Stocks- Stocks with PEG Ratio less than 1
| Company | Industry | Market Cap (In ₹ Crores) 22nd August 2024 | Current Market Price (In ₹) | P/E Ratio | PEG Ratio | ROE | 3-Year Return | 1-Year Return |
| SMC Global Securities Ltd | Stockbroking & Allied | ₹ 1,561 | ₹ 150 | 7.44 | 0.37 | 17.09% | 28% | 87% |
| IIFL Securities Ltd | Stockbroking & Allied | ₹ 7,945 | ₹ 256 | 12.73 | 0.53 | 28.67% | 45% | 247% |
| Fineotex Chemical Ltd | Specialty Chemicals | ₹ 4,174.98 | ₹ 374 | 33.98 | 0.85 | 26.79% | 56% | 29% |
| Jupiter Wagons Ltd | Engineering | ₹ 24,252 | ₹ 571 | 66.56 | 0.84 | 20.51% | 166% | 81% |
| Jindal Saw Ltd | Iron & Steel Products | ₹21,981.50 | ₹ 686 | 11.92 | 0.46 | 16.61% | 75% | 115% |
| KNR Constructions Ltd | Civil Construction | ₹ 9,652 | ₹ 343 | 11.91 | 0.51 | 23.8% | 5% | 22% |
Data as of 22nd August, 2024. Source: Company website and others.
Stocks with No Promoter Holdings
Stocks with no promoter holdings are those where the company’s ownership is entirely in the hands of public shareholders, institutional investors, or other non-promoter entities.
Key Characteristics:
–Widely Held: These companies often have a diverse and broad ownership base, which can lead to higher liquidity in the stock market.
–Professional Management: Professional executives usually manage these companies instead of founders or insiders. This allows them to prioritize operational efficiency and maximize shareholder returns.
Considerations:
-Governance: The absence of promoter holdings can lead to more transparency and adherence to corporate governance standards.
-Potential Risks: Lack of insider ownership might mean less vested interest in the company’s long-term success.
Stocks with no promoter holdings offer an attractive opportunity for investors who appreciate transparency, professional management, and a diversified ownership base. This often leads to enhanced corporate governance and accountability.
Discover the Top Companies with Zero Promoter Holdings: Leadership in Diversity
Fundamentally Strong Stocks- Stocks with No Promoters Holdings
| Company | Industry | Market Cap (In ₹ Crores) 22nd August 2024 | Current Market Price (In ₹) | P/E Ratio | Promoters holdings =0 | ROE | 3-Year Return | 1-Year Return |
| Zomato | E-Retail/ E-Commerce | ₹ 2,27,871 | ₹ 258 | 378.74 | 0 | 1.71% | 27% | 176% |
| IEX | Exchange and Data Platform | ₹ 17,606 | ₹ 197 | 47.43 | 0 | 36.08% | 12% | 57% |
| Crompton Greaves Consumer Electricals Ltd | Household Appliances | ₹ 29,850 | ₹ 464 | 63.07 | 0 | 14.66% | 2% | 52% |
| One bonus stock | ||||||||
| Avantel Ltd | Aerospace & Defense | ₹ 4,671 | ₹ 192 | 89.75 | 40.06% | 32.02% | 155% | 137% |
Data as of 22nd August, 2024. Source: Company website and others.
Conclusion
In summarizing our discussion on fundamentally strong stocks, we explored various aspects of these investments. With potential market corrections on the horizon, such stocks could offer valuable opportunities for investors. However, it’s crucial to consider careful analysis, planning, strategies, budgeting, goals, and risk tolerance when selecting stocks. Prioritizing a detailed analysis of each company and its growth prospects is essential for making informed investment decisions. That’s all for today’s blog!
Happy Reading! Invest wisely!
Disclaimer
The blog is meant for informational purposes and serves the general analysis of the stocks. The contents provided here are based on careful research and analysis utilizing the fundamental and technical indicators over some time. The post does not consist any direct recommendation about Investing or trading in the securities market. Thorough research and careful consideration are necessary for individuals to fulfil their responsibility in making financial decisions. Seeking professional advice before making any financial decisions is always advisable.
