Best stocks under ₹500 with strong financials to keep a watch in 2024 Trade Brains Trade Brains

Investing in stocks with strong financials can offers high growth and stability. Look for companies with consistent revenue growth, healthy profit margins, manageable debt levels, and positive cash flow. Consider industry trends and competitive positioning when evaluating stocks. This overview explores the landscape of Best stocks under ₹500 in India, highlighting companies with robust financial foundations.

We delve into the performance and strategies of five diverse entities spanning industries such as lubricants, railway finance, oil and gas, IT services, and power. We also examine their market positions, growth initiatives, and financial indicators, offering insights into their potential for investors seeking value in this price range.

List Of Best Stocks Under ₹500 With Strong financials

Castrol India 

Castrol India, founded in 1919, is a leading lubricant manufacturer and marketer in India. The company produces a wide range of lubricants for automotive, industrial, and marine applications. As a subsidiary of BP plc, Castrol India leverages global expertise while catering to local market needs.

Castrol India is expanding into data center thermal management, focusing on immersion cooling fluids. The company maintains a strong 20% market share in retail automotive lubricants, balancing volume growth with margin management. Recent initiatives include a new India Technology Center, ₹500 crore R&D investment in thermal management fluids, and sustainability projects like rainwater harvesting and solar power. 

Castrol’s future looks promising, with anticipated market growth due to low car penetration and continued lubricant demand in India. The company is investing in product innovations, expanding its distribution network, and exploring new technologies to maintain its competitive edge in the evolving lubricant industry.

Castrol India is demonstrating robust financial performance. The company’s revenue grew from ₹4,774 crore in 2022 to ₹5,075 crore in 2023, a 6.3% increase. Simultaneously, net profit rose from ₹815 crore to ₹864 crore, showing a 6% growth. This parallel growth suggests effective cost management alongside business expansion. Although the Operating Profit Margin slightly improved from 23% to 24%, the Net Profit Margin remained stable at around 17%, indicating consistent operational efficiency.

Despite minor declines, return ratios remain strong, with ROE at 43.1% and ROCE at 56.8% in 2023. EPS has shown remarkable improvement, from 5.89 in 2020 to a healthy 8.96 TTM. Overall, Castrol’s financial trends paint an optimistic picture for future growth.

Indian Railway Finance Corporation

Indian Railway Finance Corporation(IRFC), established by the Government of India in 1986, serves as the dedicated market borrowing arm for Indian Railways. IRFC plays a crucial role in funding railway infrastructure projects, focusing on reducing logistic costs, enhancing safety, and improving passenger experience. The company’s strategic importance is underscored by its plans to support the laying of approximately 40,000 kilometers of new track over the next six to eight years.

IRFC is exploring funding opportunities beyond Indian Railways, looking at projects within the railway ecosystem, and collaborating with other infrastructure lenders. The company is strengthening its internal mechanisms to assess and diversify business opportunities. 

IRFC faces challenges in diversifying funding sources as extra budgetary resources from Indian Railways decrease. To address this, the company is exploring forward and backward linkages for growth opportunities and planning to execute lease agreements for previously funded projects to boost revenue. The company is also exploring opportunities to refinance existing debt and manage liquidity effectively.

IRFC demonstrates resilient financial performance, with net interest income remaining stable at ₹6,205 crore in 2022 and ₹6,203 crore in 2023, followed by a 3.6% growth to ₹6,429 crore in 2024. Comparatively, net profit showed steady growth, increasing from ₹6,089.84 crore in 2022 to ₹6,337.01 crore in 2023, and further to ₹6,412.10 crore in 2024. This trend suggests effective cost management and operational efficiency.

The financing profit margin decreased from 30.12% in 2022 to 24.1% in 2024, while the net profit margin improved significantly from 16.75% in 2023 to 24.10% in 2024. Return ratios remained stable, with ROE at 13.7% and ROCE at 5.73% in 2024.

Notably, EPS has shown consistent growth, rising from 4.66 in 2022 to 4.91 in 2024, indicating improved shareholder value. Overall, IRFC’s financial trends suggest a positive outlook, with potential for continued growth and profitability which comes under the best stocks under ₹500.

Oil & Natural Gas Corporation 

Oil & Natural Gas Corporation(ONGC), established in 1956 by the Government of India, is the country’s largest crude oil and natural gas company. With over 60 years of experience, ONGC has discovered 8 out of 9 producing basins in India, contributing approximately 71% to Indian domestic production. As a Maharatna PSU, ONGC is also the most profitable public sector undertaking in India.

ONGC’s revenue is primarily derived from crude oil (70%), natural gas (17%), and value-added products (13%). The company operates through several subsidiaries, including ONGC Videsh for international operations, HPCL for oil marketing, and MRPL for refining and petrochemicals.

ONGC is actively addressing the decline in gas production from matured fields by monetizing stranded gas and completing major pipeline projects. The company aims to increase gas production from 20 BCM to 25.5 BCM over the next three years. Internationally, ONGC Videsh is involved in 37 oil & gas projects across 17 countries. 

ONGC’s revenue grew significantly from ₹531,792 crore in 2022 to ₹684,829 crore in 2023, a 28.8% increase. However, net profit decreased from ₹49,294 crore to ₹32,777 crore in the same period. In 2024 the company shows a remarkable 74.2% net profit growth to ₹57,100 crore.

Operating profit margin improved from 10.89% in 2023 to 17.31% in 2024, while net profit margin rose from 4.8% to 8.9%. Return ratios also strengthened, with ROE at 14.6% and ROCE at 15.43% in 2024. Overall, ONGC’s financials suggest a positive outlook.

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Wipro Ltd

Wipro Ltd., founded in 1945, is a global leader in Information Technology, consulting, and business process services (BPS). It stands as the 4th largest Indian player in the global IT services industry, following TCS, Infosys, and HCL Technologies. Wipro’s services span across various sectors, with a significant presence in BFSI, Consumer, Health, and Technology industries.

Wipro’s IT Services segment, accounting for about 97% of revenues, is organized into two global business lines: iDEAS and iCORE. The company has a strong international presence, with 60% of its strategic market units in the Americas, 26% in Europe, and 14% in APMEA.  Wipro is focusing on large deals, strengthening client relationships, and developing AI-powered solutions.

Despite a cautious market environment with low discretionary spending, Wipro sees momentum in sectors like BFSI, Capco, and healthcare. The company is leveraging GenAI for productivity and solutions and remains optimistic about seizing market opportunities. With a history of 26 acquisitions, Wipro continues to adapt and evolve in the dynamic IT services landscape, positioning itself for future growth in key markets and technologies.

Wipro’s revenue increased from ₹79,312 crore in 2022 to ₹90,487 crore in 2023, a 14.1% growth. However, net profit declined from ₹12,243 crore to ₹11,366 crore. Operating profit margin improved from 20.61% in 2023 to 23.48% TTM, while net profit margin recovered from 12.25% to 14.88%. ROE and ROCE slightly decreased but remain solid at 14.6% and 16.38% respectively. Overall, Wipro’s financials indicate resilience and potential for future growth.

Tata Power Company

Tata Power Company, established in 1915, is India’s largest vertically-integrated power company. It is primarily involved in the generation, transmission, and distribution of electricity. The company aims to transition completely to renewable energy sources and is diversifying into solar roof manufacturing and electric vehicle charging infrastructure. Tata Power’s operations span the entire power sector value chain, including generation, renewables, transmission and distribution, and other energy-related services.

As of H1FY24, Tata Power has a total energy capacity of 14,381 MW, with a diverse portfolio including thermal (62%), solar (22%), wind (7%), hydro (6%), and waste heat recovery/BFG (3%). 

Tata Power is making significant strides in the EV charging sector through its Tata Power EZ Charge initiative. The company has installed over 4,900 public EV charging points across 442 cities/towns, claiming market leadership with a 55% share in public charging and an 85% share in home charger installations.

Looking ahead, Tata Power is focused on expanding its renewable energy portfolio, with substantial investments in solar EPC projects and manufacturing capacity for solar cells and modules. The company’s retail customer base has grown significantly to ~12 million after acquiring a stake in Odisha’s distribution business.

With its diverse operations across the power sector value chain and strong push towards renewables and EV infrastructure, Tata Power is well-positioned to capitalize on India’s growing energy needs and the global shift towards clean energy. Tata Power’s revenue grew impressively from ₹42,815 crore in 2022 to ₹55,109 crore in 2023, a 28.7% increase, followed by 11.5% growth to ₹61,448 crore in 2024.

Net profit surged from ₹2,623 crore to ₹3,809.67 crore in 2023, and further to ₹4,280.10 crore in 2024, showing consistent profitability. Operating profit margin improved from 17.81% in 2023 to 20.51% in 2024, while net profit margin increased from 6.9% to 7%. ROE and ROCE remained strong at 14% and 10.48% respectively in 2024. Overall, Tata Power’s financials suggest a positive growth trajectory.

Conclusion

In this article, we have seen about best stocks under ₹500. The Indian stock market is presenting exciting opportunities in companies under ₹500 with strong financials. Castrol, IRFC, ONGC, Wipro, and Tata Power are demonstrating resilience and growth potential. These companies are navigating challenges while capitalizing on market trends and technological advancements.

Despite varying industry dynamics, they are maintaining profitability and exploring new avenues for expansion. Investors are finding value in these stocks due to their robust financials and strategic initiatives. As the Indian economy continues to evolve, these companies are positioning themselves for future success. However, investors should always conduct thorough research and consider their risk tolerance before making investment decisions.

What are your thoughts on the future of these 5 companies in India? Do you believe the coming years will be transformative for these firms? What might be the impact of factors like urbanization, economic growth, and technological advancements have on these companies? Share your insights below.

Written by Fazal Ul Vahab

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Investing in stocks with strong financials can offers high growth and stability. Look for companies with consistent revenue growth, healthy profit margins, manageable debt levels, and positive cash flow. Consider industry trends and competitive positioning when evaluating stocks. This overview explores the landscape of Best stocks under ₹500 in India, highlighting companies with robust financial
The post Best stocks under ₹500 with strong financials to keep a watch in 2024 appeared first on Trade Brains.   Read MoreFinancials, Market, Stocks, Best stock under ₹500 with strong financials, Castrol india analysis today, Castrol India share price target, Indian Railway Finance Corporation, IRFC share, Oil & Natural Gas Corporation, ongc share price, tata power company, Tata Power Company share price, wipro share price Trade Brains