4 Fundamentally strong stocks trading at discount of up to 55% to add to your watchlist

Fundamentally strong stocks are those that exhibit robust financial health, characterised by stable earnings, low debt levels, strong management, and competitive advantages. These stocks are typically seen as safer investments, especially during market downturns, such as the current situation in the Indian stock markets.

In the context of a downturn in the Indian stock markets, adding fundamentally strong stocks to one’s portfolio can provide a cushion against volatility. Such stocks are generally more resilient during economic challenges, offering stability and potential for capital appreciation over time.

Following are a few fundamentally strong stocks currently trading at a discount of up to 55 percent:

1. Bharat Electronics Limited

With a market cap of Rs. 2 lakh crores, the stock surged nearly 2 percent to Rs. 282.25 on Monday. The stock hit its 52-week high at Rs. 340.35 on 7th October 2024, and compared to its current trading price of Rs. 274, the stock is trading at a discount of nearly 19 percent.

In Q3 FY25, the company experienced significant growth in its revenue from operations, showing a year-on-year rise of around 38.7 percent to Rs. 5,771 crores, while the net profit grew by nearly 52.5 percent YoY to Rs. 1,312 crores.

In terms of key financial metrics, BEL has a Return on Equity (RoE) of 26.3 percent and a return on capital employed (RoCE) of 34.6 percent, with zero debt.

In addition, the company has maintained better margins over the years. In FY24, the company reported a net profit margin of  19.45 percent and an operating margin of 26.01 percent.

Headquartered in Bengaluru, Bharat Electronics Limited (BEL) is primarily engaged in the business of manufacturing and supply of electronic equipment and systems for the defence and civilian segments.

2. KFin Technologies Limited

With a market cap of Rs. 19,834.6 crores, the stock slumped nearly 6.4 percent to Rs. 1,145.4 on Monday. The stock hit its 52-week high at Rs. 1,640 on 30th December 2024, and compared to its current trading price of Rs. 1,153, the stock is trading at a discount of nearly 30 percent.

In Q3 FY25, the company experienced significant growth in its revenue from operations, showing a year-on-year rise of around 32.4 percent to Rs. 290 crores, while the net profit grew by nearly 34.3 percent YoY to Rs. 90 crores.

In terms of key financial metrics, KFin Technologies has a Return on Equity (RoE) of 24.5 percent and a return on capital employed (RoCE) of 30.3 percent, with a debt-to-equity ratio of 0.04.

In addition, the company has maintained better margins over the years. In FY24, the company reported a net profit margin of 29.66 percent and an operating margin of 40.38 percent.

KFin Technologies Limited is engaged in providing the service of Registrar to the Public Issue of Securities, Registrar to the Securities Transfers, and back office operations to mutual fund houses and data processing activities.

Also read: Fortis Healthcare in focus after reporting 83% YoY increase in net profits

3. Shilchar Technologies Limited

With a market cap of Rs. 4,574.4 crores, the stock surged nearly 1.4 percent to Rs. 6,350 on Monday. The stock hit its 52-week high at Rs. 8,899 on 6th December 2024, and compared to its current trading price of Rs. 6,010, the stock is trading at a discount of nearly 32 percent.

In Q3 FY25, the company experienced significant growth in its revenue from operations, showing a year-on-year rise of around 30.5 percent to Rs. 154 crores, while the net profit grew by nearly 35 percent YoY to Rs. 35 crores.

In terms of key financial metrics, Shilchar Technologies has a Return on Equity (RoE) of 55.5 percent and a return on capital employed (RoCE) of 74.6 percent, with zero debt.

In addition, the company has maintained better margins over the years. In FY24, the company reported a net profit margin of 23.15 percent and an operating margin of 31.12 percent.

Shilchar Technologies Limited is engaged in the business of manufacturing of “Distribution & Power Transformers” as well as “Electronics & Telecommunication Transformers.”

4. Jupiter Wagons Limited

With a market cap of Rs. 14,165.5 crores, the stock surged nearly 2 percent to Rs. 348.75 on Monday. The stock hit its 52-week high at Rs. 748.05 on 5th July 2024, and compared to its current trading price of Rs. 334, the stock is trading at a discount of nearly 55 percent.

In Q3 FY25, the company experienced significant growth in its revenue from operations, showing a year-on-year rise of around 15 percent to Rs. 1,030 crores, while the net profit grew by nearly 18.5 percent YoY to Rs. 96 crores.

In terms of key financial metrics, Jupiter Wagons has a Return on Equity (RoE) of 27.3 percent and a return on capital employed (RoCE) of 31.4 percent, with a debt-to-equity ratio of 0.18.

In addition, the company has maintained better margins over the years. In FY24, the company reported a net profit margin of 9.15 percent and an operating margin of 13.32 percent.

Jupiter Wagons Limited, formerly known as Commercial Engineers and Body Builders Co Limited, is engaged in the business of manufacturing railway wagons, wagon components, castings, metal fabrication comprising load bodies for commercial vehicles, rail freight wagons and components.

Written by Shivani Singh

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