4 Fundamentally Strong Stocks with Low Beta to Watch in 2024
4 Fundamentally Strong Stocks : Investing in stocks can be rewarding, but volatility often makes it challenging for investors to stay calm during market fluctuations. That’s where low-beta stocks come into play. Beta is a financial metric that measures a stock’s volatility in comparison to the overall market. A beta of less than 1 suggests that a stock is less volatile, making it a safer investment choice during uncertain times.
In this article, we explore four fundamentally strong stocks with a beta lower than 1, indicating stability and consistent performance.
1. Trent Limited
Company Overview:
Trent Ltd., a part of the Tata Group, operates well-known retail brands such as Westside, Zudio, and Star Bazaar. The company has been expanding its retail footprint across India, capitalizing on the growing demand for fashion and lifestyle products.
Key Financials (Q3FY23-24):
- Beta: 0.67
- Market Capitalization: ₹1,77,464.67 crore
- Revenue Growth: 32.9% (from ₹3,546.95 crore to ₹4,715.64 crore)
- Net Profit Growth: 32.8% (from ₹374.36 crore to ₹497.25 crore)
- Return on Equity (RoE): 29.14%
- Return on Capital Employed (RoCE): 30.26%
- Debt-to-Equity Ratio: 0.39
👉 Trent’s strong growth in revenue and profits highlights its dominance in the retail sector. With a low beta, it is a stable investment option for long-term investors.
2. Sun Pharmaceutical Industries Ltd
Company Overview:
Sun Pharma is India’s largest pharmaceutical company and one of the top generic drug manufacturers worldwide. The company specializes in oncology, cardiology, dermatology, and neurology drugs, with a strong presence in both domestic and international markets.
Key Financials (Q3FY23-24):
- Beta: 0.87
- Market Capitalization: ₹3,96,408.44 crore
- Revenue Growth: 11.96% (from ₹12,630 crore to ₹14,141 crore)
- Net Profit Growth: 15% (from ₹2,523.75 crore to ₹2,903.38 crore)
- Return on Equity (RoE): 15.99%
- Return on Capital Employed (RoCE): 18.11%
- Debt-to-Equity Ratio: 0.04
👉 Sun Pharma’s strong financials, global presence, and low debt make it an excellent low-beta stock for investors looking for stability in the healthcare sector.
3. Infosys Limited
Company Overview:
Infosys is a leading IT services company offering software development, consulting, and business process outsourcing (BPO) services globally. The company is at the forefront of digital transformation, artificial intelligence, and cloud computing, making it a tech powerhouse.
Key Financials (Q3FY23-24):
- Beta: 0.48
- Market Capitalization: ₹6,87,734.24 crore
- Revenue Growth: 7.61% (from ₹39,610 crore to ₹42,623 crore)
- Net Profit Growth: 11.5% (from ₹6,106 crore to ₹6,806 crore)
- Return on Equity (RoE): 31.32%
- Return on Capital Employed (RoCE): 39.02%
- Debt-to-Equity Ratio: 0.09
👉 Infosys continues to be a strong player in the IT sector with impressive RoE and RoCE, ensuring high profitability and low risk.
4. Solar Industries India Limited
Company Overview:
Solar Industries India Ltd. is a leading manufacturer of industrial and defense explosives. The company supplies to industries such as mining, construction, and defense, making it a key player in India’s defense modernization efforts.
Key Financials (Q3FY23-24):
- Beta: 0.54
- Market Capitalization: ₹88,226.45 crore
- Revenue Growth: 37.6% (from ₹1,440.05 crore to ₹1,982.62 crore)
- Net Profit Growth: 54.9% (from ₹203.33 crore to ₹314.87 crore)
- Return on Equity (RoE): 26.64%
- Return on Capital Employed (RoCE): 30.55%
- Debt-to-Equity Ratio: 0.32
👉 With robust revenue and profit growth, Solar Industries is a strong investment option in the defense and industrial sector, offering long-term stability.
Financial Summary (Comparison Table)
| Stock | Beta | Market Cap (₹ Cr) | Revenue Growth | Net Profit Growth | RoE | RoCE | Debt-to-Equity Ratio |
|---|---|---|---|---|---|---|---|
| Trent Ltd. | 0.67 | 1,77,464.67 | 32.9% | 32.8% | 29.14% | 30.26% | 0.39 |
| Sun Pharma | 0.87 | 3,96,408.44 | 11.96% | 15% | 15.99% | 18.11% | 0.04 |
| Infosys Ltd. | 0.48 | 6,87,734.24 | 7.61% | 11.5% | 31.32% | 39.02% | 0.09 |
| Solar Industries | 0.54 | 88,226.45 | 37.6% | 54.9% | 26.64% | 30.55% | 0.32 |
Why Consider Low Beta Stocks?
📌 Less Volatility: They tend to be more stable compared to high-beta stocks, reducing risk.
📌 Consistent Returns: Fundamental strength ensures steady long-term growth.
📌 Ideal for Risk-Averse Investors: Suitable for those looking to avoid extreme market fluctuations.
Frequently Asked Questions (FAQs)
1. What does a low beta value indicate in stocks?
A beta below 1 means the stock is less volatile than the overall market, making it a safer investment option.
2. Why should I invest in low-beta stocks?
Low-beta stocks provide stability, less risk, and consistent long-term returns, especially during market downturns.
3. Which stock has the lowest beta in this list?
Infosys Limited has the lowest beta of 0.48, indicating minimal price fluctuations compared to the market.
4. Which stock has the highest Return on Equity (RoE)?
Infosys Limited has the highest RoE of 31.32%, showcasing its strong profitability.
5. Is a low debt-to-equity ratio important?
Yes! A lower debt-to-equity ratio means the company has less debt, reducing financial risk.
Final Thoughts
Investing in fundamentally strong stocks with low beta is a great way to build a stable and resilient portfolio. The four companies listed—Trent, Sun Pharma, Infosys, and Solar Industries—are well-established, profitable, and positioned for steady growth.
🔍 Keep these stocks on your watchlist and invest wisely for long-term wealth creation! 🚀
For more market insights, follow our news.
Stay tuned for more updates and insights on the stock market! For more insights on investing in the Indian stock market, check out resource like MoneyControl, ET, NSE India.
Disclaimer: This blog post is for informational purposes only and should not be considered financial advice. Investors should conduct thorough research and consult with a qualified financial advisor before making any investment decisions.