Best Stocks to Buy Under Rs 500 in 2023

Introduction

Investing in the stock market provides a good option for progressive wealth accumulation, and you don't always need a large budget to get started. In 2023, there will be numerous potential stocks priced under Rs 500. This blog will go over the top five stocks in this area that you should think about adding to your investment portfolio.

Best Stocks to Buy Under Rs 500 in 2023

Bharat Electronics Ltd

Bharat Electronics Ltd, founded in 1954, specializes in the manufacture and supply of electronic equipment and systems for the defense industry. BEL is a diverse company that provides a wide range of products and systems to India's military services. 

They specialize in radars, fire control systems, missile systems, naval systems, anti-submarine warfare systems, electro optics, tank electronics, and gun upgrades.

The corporation is practically debt-free. It also pays a dividend yield of 45.4%.

NMDC Ltd

The National Mineral Development Corporation (NMDC) was established in 1958 as a 100% government-owned organization under the Ministry of Steel. 

NMDC is active in iron ore exploration and extraction, as well as sponge iron manufacture and sale. They also produce and distribute wind energy.

NMDC is a debt-free corporation with a track record of 27.9% return on equity (ROE) over the last three years. They have continuously paid out a dividend yield of 38.9%.

Jupiter Wagons Ltd

In India, Jupiter Group is a significant manufacturer of railway wagons, passenger coaches, wagon components, and castings. They also produce modern railway transportation equipment on a global scale.

The company is expected to post a successful quarter, and it has achieved outstanding profit growth over the last five years, with a compound annual growth rate (CAGR) of 40.0%.

Gujarat Mineral Development Corporation Ltd

Gujarat Mineral Development Corporation is largely involved in two industries: mining and electricity generation. Lignite, Bauxite, Fluorspar, Multi-Metal, Manganese, Power, Wind, and Solar are among their initiatives.

The company harvests lignite, bauxite, fluorspar, manganese, silica sand, limestone, bentonite, and ball clay from various districts in Gujarat, including Kutch, Surat, Baroda, Rajkot, Jamnagar, Porbandar, Amreli, and Bhavnagar.

The stock has a 3.17% dividend yield and has exhibited outstanding earnings growth with a 28.5% CAGR over the last five years.

WIPRO Ltd

Wipro Ltd is a multinational corporation that provides information technology, consulting, and business process services (BPS). Following TCS, Infosys, and HCL Technologies, it is the fourth-largest Indian player in the worldwide IT services market.

Wipro has a lengthy track record of earning investors' trust and is a popular choice for equities priced under Rs. 500.

Key Factors Considered for Stock Selection:

Sustained Sales Growth: We prioritized businesses that have shown continuous sales growth over the last five years.

Strong Return on Equity: We were looking for companies that had a minimum return on equity (ROE) of 15% or higher. A higher ROE suggests a better return on investment for shareholders.

Promoter's Ownership: We favor companies where the promoters own more than 50% of the stock. This represents a definite commitment on the part of the company's founders or main stakeholders.

Favourable Debt to Equity Ratio: We sought for organizations with a debt-to-equity ratio of less than one, indicating a balanced and sustainable financial structure.

Bankruptcy Risk Assessment: To reduce the chance of bankruptcy, we looked at each company's Altman Z Score and made sure it was more than 3. This criterion increases the likelihood of avoiding bankruptcy-related troubles in the near future.

Also read :- Best Stocks to Buy Under Rs 50 in 2023

Conclusion

Investing in the stock market can be a lucrative way to develop your money, and you don't have to start with a hefty budget. The aforementioned shares are expected to grow in value and are available for less than Rs. 500 per share, making them accessible to a wide spectrum of investors.

However, it should be mentioned that before investing in any company, you should undertake careful research, examine your financial goals, and, if required, speak with a financial expert. 

Diversifying your portfolio and taking a long-term investment approach are essential measures for successful investing. These stocks are worth examining as part of your investment journey in 2023.