Last Updated on Oct 11, 2023 by Anjali Chourasiya

What happens if you build a house on a poor foundation? It crumbles down. Therefore, getting the foundation, aka fundamentals, right is key to having a strong base for a stronger house. The same applies to your investment portfolio – building one with fundamentally strong companies can help weather market storms and remain on the relatively brighter side. But what are stocks with strong fundamentals, and how to identify them? Let’s decode that and take a look at the top 10 fundamentally strong stocks in India in 2023 in this article.

Top fundamentally strong stocks in India – Updated October 2023

NameSub-SectorMarket Cap (Rs. in cr.)Close Price (Rs.)PE Ratio (%)Volatility (%)Debt to Equity (%)Net Income (Rs. in cr.)Return on Equity (%)
Nestle India LtdFMCG – Foods2,17,306.0822,506.9090.9016.7211.002,390.52108.52
Coal India LtdMining – Coal1,78,842.38295.206.3523.777.4728,165.1955.32
Tata Consultancy Services LtdIT Services & Consulting12,94,114.993,528.6030.7018.458.4342,147.0046.56
Infosys LtdIT Services & Consulting5,95,737.361,435.4524.7223.8510.9524,095.0031.80
ITC LtdFMCG – Tobacco5,49,655.56444.4028.6418.860.4419,191.6629.00
LTIMindtree LtdIT Services & Consulting1,55,781.635,209.8535.3426.122.134,408.3028.54
Asian Paints LtdPaints3,03,985.883,161.0574.0317.5811.754,106.4526.80
HCL Technologies LtdIT Services & Consulting3,36,240.961,234.8022.6421.117.3314,851.0023.31
Dr Reddy’s Laboratories LtdPharmaceuticals90,361.515,587.0020.0518.675.794,507.3021.21
Eicher Motors LtdTrucks & Buses94,176.663,446.9532.3223.981.922,913.9421.12
Bajaj Auto LtdTwo Wheelers1,41,665.435,063.7023.3820.770.426,060.2120.47
Hindustan Unilever LtdFMCG – Household Products5,78,081.692,465.6057.1218.262.4110,120.0020.32
Tech Mahindra LtdIT Services & Consulting1,19,938.231,222.8024.8325.709.654,831.3017.32
Hero MotoCorp LtdTwo Wheelers59,361.093,057.2521.1321.693.382,809.9617.15
Sun Pharmaceutical Industries LtdPharmaceuticals2,71,676.701,158.6532.0616.6311.618,473.5815.35

Note: The data is from 1st October 2023. The stock selection for swing trading was made on Tickertape Stock Screener and based on the following parameters.

  • Stock Universe: Nifty 50
  • Net Income: Positive – Set the lower value to zero
  • Return on Equity: Set to High
  • Debt-to-Equity Ratio: Set to Low

Details of the top 3 fundamentally strong stocks in India

Nestlé India Ltd

The Indian subsidiary of the Swiss MNC Nestlé, this company’s product range includes chocolates, confectioneries, food, and beverages. Nestlé India’s market capitalisation is Rs. 2,17,306.08 cr. The stock is 1.59x as volatile as the Nifty.

As of 1st October, Nestlé India’s key metrics are as follows: 

  • Total liabilities: Rs. 6,519.57 cr.
  • Total assets: Rs. 8,978.74 cr.
  • Capital Expenditures: Rs. 549.92 cr.
  • Dividend yield: 0.98%
  • Sector PB (Price to Book): 9.37
  • Sector dividend yield: 1.56%

loading widget to trade NESTLEIND

Coal India Ltd

A government-owned coal mining and refining corporation, Coal India Limited is a Maharatna company. CIL contributes ~80% of the country’s domestic coal production and 65% of consumption. This large-cap stock has a market capitalisation of Rs. 1,78,842.38 cr. and is 2.23x as volatile as Nifty.

As of 1st October, Coal India’s key metrics are as follows: 

  • Total liabilities: Rs. 1,51,860.40 cr.
  • Total assets: Rs. 2,09,875.97 cr.
  • Capital Expenditures: Rs. 15,313.56 cr.
  • Dividend yield: 8.36%
  • Sector PB (Price to Book): 2.86
  • Sector dividend yield: 3.13%

loading widget to trade COALINDIA

Tata Consultancy Services Ltd

One of the fundamentally strong IT stocks, TCS has a market capitalisation of Rs. 12,94,114.99 cr. It is the second-largest Indian company and a leading global IT services and business solutions provider. This large-cap stock has a risk of 1.74x as volatile as the Nifty.

As of 1st October, TCS’s key metrics are as follows: 

  • Total liabilities: Rs. 51,653 cr.
  • Total assets: Rs. 1,42,859 cr.
  • Capital Expenditures: Rs. 3,100 cr.
  • Dividend yield: 3.25%
  • Sector PB (Price to Book): 7.38
  • Sector dividend yield: 2.49%

loading widget to trade TCS

What are fundamentally strong stocks?

Fundamentally strong companies have strong underlying businesses. Thanks to this, such companies tend to perform well even in market downturns. So when other shares are bleeding during a stock market correction, a stock with strong fundamentals would probably be doing better than them.

How to find fundamentally strong stocks?

What are the features of companies with good fundamentals? What makes them stand apart?

There is not one but several factors that define fundamentally strong companies. And to get meaningful insights, you need to look at all these parameters in tandem, not in isolation. Such parameters include capital, management, profitability, products, debt, and so on. Let’s look at them one by one.

  1. Capital and debt

Since finance is the blood of any business, it cannot be done without ample funds. At the outset, a company with good fundamentals has sufficient and more capital to:

  • Run day-to-day business
  • Meet short- and long-term liabilities
  • Fund expansion projects
  • Purchase critical assets
  • Fund capital expenditures
  • Compensate employees

If a company has insufficient funds, it would have to borrow funds, which comes at a cost. This leads us to an equally important feature of stocks with good fundamentals – debt.

Debt is the money that a company borrows to fund its business operations and short- and long-term liabilities. The business has to repay the debt and interest, which is the cost of borrowing. Therefore, a company should not be overburdened with debt as it will eat into the profits and hence can limit its growth. Again, this doesn’t mean debt is a bad thing. In fact, a company should have an ideal mix of debt and capital. Here’s why.

All funds come at a cost. Equity (capital), too. While debt is an obligation, equity represents ownership, as shareholders of a company are owners of the business. Generally, the cost of equity is more than the cost of debt because while shareholders bear high risk in return for the ownership, lenders’ risk is only limited to the amount they lend.

You can measure the proportion of borrowed funds to the capital of a company using the debt-to-equity ratio. There is no ideal debt-to-equity ratio as it varies across industries. So a little research in this area will help.

  1. Management

Yes, people come, and people go, but the company remains forever. But what is a company without people? Even the best debt and equity can go to waste if the people sitting in the management team of a company lack a good attitude and skills. But for a company to be fundamentally strong, it has to weather the storms. This is only possible if the captains steering the ship have determination, skills, a growth mindset, problem-solving skills, and other leadership qualities.

  1. Profitability

It goes without saying that a fundamentally strong company is a profitable business. You can gauge this by using the return on equity (ROE) ratio, which tells how effectively a company uses its equity capital and retained earnings to generate profits. Additionally, you can also look at the company’s 5-yr CAGR to gauge the returns that it has given to its shareholders in the last 5-yr. A fundamental company may not have given the best returns in the short term but delivers above-average returns in the long term.

How to buy fundamentally strong stocks?

You can buy stocks with strong fundamentals just like you purchase any other stocks. One of the easiest and most efficient ways to buy/sell stocks is via Tickertape. From filtering stocks and evaluating their feasibility of investing to placing stock orders, Tickertape supports the end-to-end process of placing stock orders. Let’s take a look at how to place a buy order for stocks on Tickertape using the Basket and Transaction features.

Transaction and Basket features work along the lines of online purchases. Once you shortlist the stocks that you want to buy, add them to the Basket and execute a single buy order using Transactions. Thanks to these features, you don’t have to jump platforms to research your investments and place buy orders.

Before starting a transaction on Tickertape, make sure that your broker account is connected to your Tickertape account. Once done, follow these steps:

Filter fundamentally strong using

Head on to Tickertape’s Stock Screener and filter stocks with strong fundamentals using ratios and key metrics.

Analyse stocks

Evaluate each of these stocks on the respective Stock Pages. Tickertape Stock Pages give comprehensive details on the company’s financials, peers, corporate actions, and more.

Add stocks to Basket

On shortlisting stocks to buy, click on ‘Place Order’ on the Stock Page. Select between buy or sell type and set the quantity to trade. Click on the ‘Add to Basket’ button to add the stock to your Basket.

Open Your Basket page

After adding all the fundamentally strong stocks to the Basket, click on the Basket icon on the top header of the page. You will land on the “Your Basket” page.

Execute the buy order

Verify your order and make necessary changes, if any. Then execute the transaction by clicking on the ‘Place Orders’ button.

Buying multiple stocks on Tickertape is really that simple.

Why fundamental analysis of stocks is important? 

The importance of fundamental analysis of stocks is not limited to one reason. Here are a few reasons why.  

  • It helps to determine the fair value of a stock.
  • You can evaluate the health and performance of a company by looking at its financials and macroeconomic factors. 
  • It helps an investor to gauge whether a stock is overvalued or undervalued. 
  • An investor can understand the company’s strength and capability to stand out from its competitors. 
  • It also helps the investor understand the business model of a firm. 

Frequently Asked Questions (FAQs) 

Which stock is fundamentally strong?

Stocks of companies with thriving businesses are fundamentally strong. They are characterised by sound management, ideal capital and debt, and profitability among other indicators.

How do you filter a fundamentally strong stock?

There are many ways to do it. One of the easiest is to filter a fundamentally strong stock is by using Tickertape’s Stock Screener. Built with over 200 filters, the Stock Screener is responsive and intuitive. All you need to do is apply relevant filters relating to profitability, debt, capital, revenue, returns, and others to get a list of fundamentally strong stocks in no time.

Where can I buy fundamentally strong stocks in India?

Buying fundamentally stocks with strong fundamentals is different from the regular process. However, doing it on Tickertape will save your time and efforts. Tickertape offers you a single platform to filter stocks, research them, and place buy orders. Read above to find a detailed step-by-step process to do the same.

What are the three aspects of fundamental analysis?

The basic aspects of fundamental analysis that need to be thoroughly analysed in stock are industry analysis, company analysis and economic analysis.

Will the fundamentally strong stocks withstand inflation?

Fundamentally strong stocks have chances of withstanding inflation with their strong financials. However, it is to be noted that stock market investment involves risk, and it is recommended to keep your investment portfolio diversified.  

How to get the financials of a company?

You can get a company’s financials by visiting the company’s website. Alternatively, you can also get a company’s financial information on Tickertape. Search for a stock on Tickertape and click the financials tab, where you can get all the relevant information. 
Nikitha Devi
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