Five fundamentally strong stocks in India to add to your watchlist

The benchmark Nifty 50 has surged by more than 30% over the past two years, with broader indices following suit.

Robust earnings, policy continuity, and steady domestic flows have powered the rally. The side effect is that valuations across sectors have moved well above long-term averages. At around 22 times earnings, the Nifty 50 is no longer cheap.

Investors often gravitate toward the usual favourites such as companies with visible growth, strong balance sheets and leadership positions. But when everyone crowds into the same names, the scope for outsized returns narrows.

In such markets, opportunities arise from a bottom-up approach, where businesses generate steady cash flows, operate efficiently, and carry little or no debt, while still trading at reasonable valuations.

These are the companies that can withstand cycles and create value over the long term.

Welspun Corp Ltd

Welspun Corp has evolved into a diversified player in pipe solutions and building materials.

Its portfolio spans line pipes, ductile iron pipes, stainless steel bars, rebars, and plastic pipes under the Sintex brand.

The company serves the energy, water, and infrastructure sectors in India and overseas, with a strong order book of around ₹19,000 core.

FY25 consolidated revenue stood at ₹13,880 crore with an Ebitda margin of 15.2%.

In the June 2025 quarter, consolidated income stood at ₹3,590 crore with Ebitda of ₹560 crore, translating into a margin of 15.6%.

Line pipes and DI pipes together accounted for the bulk of volumes, while stainless steel and rebars added niche contributions. The mix was supported by strong offshore demand for high-grade pipes and rising traction from India’s water and gas projects.

Looking ahead, Welspun is ramping up capacity across ductile iron pipes and stainless steel bars.

The bright bar project is on track for commissioning in Q3FY26, opening a higher-value segment. Its greenfield DI pipe facility in Saudi Arabia is also progressing well.

Capex is directed at these expansions and brand-building in Sintex, with spending largely funded through internal accruals.

The stock trades at a PE of 13.8, in line with its five-year median multiple of 14.2.

Railtel Corporation of India Ltd

RailTel Corporation of India, a Navratna PSU under the ministry of railways, has built one of the country’s largest neutral telecom networks.

Its portfolio spans telecom services, system integration, data centres, cloud solutions, and cybersecurity, along with a long-standing role in railway digital transformation.

The company also operates RailWire, one of the top broadband providers in rural India.

FY25 was a landmark year as RailTel posted its highest-ever revenue of ₹3,480 crore, up 35% year-on-year. Ebitda margin remained healthy, reflecting disciplined execution and the asset-light nature of its business.

The momentum carried into Q1FY26, when revenue grew 33% year-on-year, with projects accounting for ₹410 crore and telecom ₹330 crore. RailTel’s order book stood at ₹7,200 crore at the end of June 2025, including nearly ₹500 crore in Kavach projects.

Looking ahead, RailTel is investing ₹240 crore in FY26 to expand edge data centres and strengthen cybersecurity.

It’s also scaling international forays in South Asia and Africa. With no debt on its books and consistent dividend payouts, the company is well-placed to fund growth through internal accruals.

The stock trades at a PE of 37.4, a premium to its five-year median of 29.

BSE Ltd

BSE has steadily reinvented itself into a diversified financial services platform. Beyond equities, it now operates across derivatives, debt, mutual funds, insurance distribution, and data services.

The StAR MF platform has emerged as the largest in India, while the exchange also holds a 15% stake in CDSL, strengthening its ecosystem play.

FY25 consolidated revenue grew 62%, supported by equity derivatives relaunch and record flows on the StAR MF platform. Ebitda margin for the year expanded to 62%.

The June 2025 quarter revenue rose 59% year-on-year, driven by higher transaction charges and robust growth in equity derivatives. Mutual fund distribution order volumes were up 30% and revenue was higher by 23%.

Ebitda margin expanded to 65% from 47% a year ago, due to the strong top line and disciplined cost control.

Contributions from associates such as CDSL and India INX added further heft. The management credited the derivative relaunch, rising retail participation, and deeper penetration of the StAR MF platform as key drivers.

Looking ahead, BSE is investing in expanding its clearing corporation and developing new indices, alongside broadening the derivatives suite.

Technology spending is being scaled up to handle peak trading volumes, funded through internal accruals. The company is targeting leadership in mutual fund distribution and aims to grow its derivatives share meaningfully.

The stock trades at a PE of 52.5, a premium to its five-year median multiple of 47.

Hyundai Motor India Ltd

Hyundai Motor India has played a big role in shaping India’s passenger vehicle market for nearly three decades.

The company is best known for building popular models across hatchbacks, sedans and SUVs, with the Creta firmly established as the country’s top-selling mid-size SUV.

FY25 ended on a mixed note, with total volumes of 762,000 vehicles, broadly flat year-on-year. SUVs continued to dominate, accounting for nearly 69% of sales, while CNG cars gained traction.

The June 2025 quarter sales stood at 180,399 vehicles, down 6% year-on-year, as weak domestic demand weighed on volumes. Exports, however, grew 13% to 48,140 units, lifting exports’ share to 28% of the overall mix.

Revenue declined 6.6%, while Ebitda margins were resilient at 13.3%, supported by higher export contribution and tighter cost control.

Management pointed out that disciplined promotion spending and a better product mix helped sustain profitability in a competitive environment.

Looking ahead, Hyundai has outlined an ambitious product pipeline, targeting 26 launches by FY30, including new powertrain technologies.

Capex will be directed towards expanding manufacturing efficiency and developing green hydrogen solutions through its new HTWO Innovation Centre in partnership with IIT Madras. These investments are expected to be funded largely via internal accruals.

Presently, the stock trades at a PE of 39.

Symphony Ltd

Symphony is the world’s largest air-cooler company with a presence in more than 60 countries.

Over the years, it has steadily expanded beyond residential cooling to include commercial and industrial solutions, as well as adjacent products such as tower fans and water heaters.

FY25 was a year of revival. Symphony's standalone revenue rose 18% to ₹1,180 crore, on the back of a hot summer and deeper penetration in semi-urban markets. India accounted for nearly 68% of consolidated revenue, and the rest was by international subsidiaries.

The domestic business benefited from category expansion and new model launches, while overseas operations delivered steady growth, particularly in China, which turned profitable after years of investment.

The Ebitda margin, however, contracted to 20.2% from 24.2% in FY24, due to an adverse product mix and higher costs tied to scaling new products. In Q1FY26, revenue fell 39% year-on-year as an early monsoon cut short the peak season, pulling down Ebitda margin to 10.3%.

Looking ahead, Symphony is investing in building a more resilient portfolio. The recently launched “Air Force" range has seen strong traction, while counter-seasonal categories, such as water heaters and tower fans, are gaining marketshare.

The company's capex remains light, with growth funded through internal accruals and a treasury balance of over ₹360 crore. The asset-light model in international markets is also expected to strengthen operating leverage.

At current levels, the stock trades at a PE of 30, a discount to its five-year median multiple of 52.

Conclusion

Even in an expensive market, fundamentally strong stocks provide an anchor. They strike a balance between growth and stability, providing investors with a margin of safety.

The challenge is to look past the noise, separate durable businesses from passing trends, and focus on quality. In this kind of market, being selective matters more than ever.

Focus on fundamentals, maintain a margin of safety, and avoid confusing price action with business strength. Investors should carefully evaluate financials, governance standards, and valuations before making investment decisions.

These are the habits that turn fundamentally strong companies into long-term wealth creators.

Happy Investing.

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such.

This article is syndicated from Equitymaster.com.