Investing in the stock market doesn’t always require buying expensive shares. Many fundamentally strong Indian stocks trade under ₹200, offering retail investors an opportunity to grow wealth without breaking the bank. But price alone is not enough — the company’s fundamentals matter the most.
In this guide, we’ll explore how to identify strong stocks under ₹200, key metrics to watch, and some examples of promising picks in 2025.
Why Focus on Stocks Under ₹200?
Stocks under ₹200 are often overlooked by big investors, making them a potential sweet spot for retail traders. These “budget-friendly” stocks can offer value if the company has solid fundamentals.
However, a low share price does not automatically mean a bargain. The right stocks combine affordability with strong financial health, growth potential, and manageable risk.
Key Metrics to Identify Strong Stocks Under ₹200
When searching for fundamentally strong stocks under ₹200, consider the following metrics:
1. Profitability: Net Profit Margin and Operating Margin
A profitable company shows consistent earnings from its core business. For example, companies with a net profit margin of 8–15% and operating margins of 10–12% are generally considered stable.
2. Return on Equity (ROE) and Return on Capital Employed (ROCE)
ROE indicates how efficiently a company generates profit from shareholders’ equity. ROCE measures overall capital efficiency. For a fundamentally strong stock, aim for ROE above 15% and ROCE above 10%.
3. Debt Levels
High debt increases financial risk. A debt-to-equity ratio below 0.5 is usually safer, especially in sectors sensitive to economic fluctuations.
4. Valuation Metrics: P/E and P/B Ratios
Price-to-earnings (P/E) and price-to-book (P/B) ratios help identify undervalued stocks. Low multiples compared to peers can indicate an attractive investment, but ensure growth prospects are reasonable.
5. Business Model and Growth Potential
Check the company’s competitive advantage, market position, and industry trends. Sectors with strong growth prospects, such as renewable energy, infrastructure, or consumer goods, often outperform.
6. Management Quality
A trustworthy and experienced management team is crucial. Look for transparency, consistent performance, and shareholder-friendly policies.
Examples of Strong Stocks Under ₹200 in 2025
Here are a few examples of Indian stocks under ₹200 with solid fundamentals. These are for informational purposes only.
1. Oil and Natural Gas Corporation (ONGC)
- Price: ~₹165
- P/E: 5.11
- ROE: 19.5%
- ROCE: 16.8%
ONGC is a leading oil and gas company in India. Its low valuation and strong scale make it attractive, though commodity price volatility is a risk.
2. Tata Steel Ltd
- Price: ~₹190
- 5-Year CAGR: ~19%
Tata Steel is one of India’s major steel producers. Its growth potential depends on infrastructure demand and global steel prices. Cyclical nature of the business is a factor to watch.
3. Bank of Maharashtra
- Price: ~₹55
- P/E: 7.16
This public-sector bank is showing improving fundamentals and could benefit from banking reforms. Risks include NPAs and slower growth compared to private banks.
4. GAIL (India) Ltd
- Price: ~₹171
- Sector: Energy infrastructure
GAIL is a key player in gas transmission and marketing. The company benefits from long-term energy demand but faces regulatory and commodity-related risks.
How to Build a Portfolio of Stocks Under ₹200
- Screen Stocks: Filter for price under ₹200 and reasonable market capitalization.
- Check Fundamentals: Focus on profitability, ROE/ROCE, debt, and growth prospects.
- Evaluate Valuation: Compare P/E and P/B ratios with peers.
- Assess Risk: Be aware of sector volatility and company-specific risks.
- Diversify: Avoid putting all your capital in just one or two cheap stocks.
Risks to Consider
- Low-priced stocks may be cheap for a reason, such as poor performance or high debt.
- Many under ₹200 stocks are in cyclical sectors like commodities or banking, making them volatile.
- Low P/E can be a value trap if growth is limited or risk is high.
- Always evaluate management quality, liquidity, and industry trends.
Conclusion
Investing in stocks with strong fundamentals under ₹200 can be a smart strategy for retail investors looking for affordable yet promising options. Focus on profitability, efficiency, debt levels, and growth potential rather than just the stock price. With careful research, these stocks can become a valuable part of a diversified investment portfolio in 2025.
| # | Stock | Approx. Price* | Key Metrics & Notes | Why it looks interesting | Things to check |
|---|---|---|---|---|---|
| 1 | Oil and Natural Gas Corporation Ltd (ONGC) | ~₹165 | P/E ≈ 5.11, ROE ≈ 19.5%, ROCE ≈ 16.8% (Trade Brains) | Large PSU with very low valuation. | Commodity risk, govt policy impact, margin swings. |
| 2 | NMDC Ltd | ~₹110 | P/E ≈ 6.35, ROE ≈ 28.96%, ROCE ≈ 37% (Trade Brains) | Strong return ratios in mining business. | Cyclical sector, input/cost risks, global demand. |
| 3 | Steel Authority of India Ltd (SAIL) | ~₹133 | Under “low P/E PSU under ₹200” list, P/E ~18 (ValueBroking) | Big iron & steel player, possibility of turnaround. | Steel is highly cyclical, raw‐material/energy price risk. |
| 4 | Indian Oil Corporation Ltd (IOC) | ~₹150 | P/E ~12.58 (Dhan) | Major public‐sector oil company, decent size. | Refining margins can change, regulatory pressures. |
| 5 | GAIL (India) Ltd | ~₹172 | Listed as PSU stock under ₹200 with P/E ~10.8 (ValueBroking) | Energy infrastructure business, good size. | Gas price/regulation risk, demand fluctuations. |
| 6 | CESC Ltd | ~₹181 | Power sector, P/E ≈ 18 in “low P/E power stocks under ₹200” list (ValueBroking) | If power demand grows, could benefit. | Power sector has overheads, regulatory risks. |
| 7 | L&T Finance Holdings Ltd | ~₹194 | Finance stock under ₹200, P/E ~18.58 (ValueBroking) | Financials can offer good upside if credit growth picks up. | Credit risk, interest rate cycle, macro slowdown. |
| 8 | Punjab National Bank (PNB) | ~₹107 | PSU bank, P/E ~8.23 under “psu stocks under ₹200” list (ValueBroking) | Very low valuation, possible upside if banking reform works. | NPAs (bad loans) risk, regulatory & governance issues. |
| 9 | Aditya Birla Capital Ltd | ~₹158 | From “mid cap stocks under ₹200” list: P/E ≈ 8.28, ROE ≈ 11.5% (Trade Brains) | Diversified financial services, reasonable metrics. | Financials sector risk, growth needs to pick up. |
| 10 | Satia Industries Ltd | ~₹133 | P/E ≈ 5.58, ROE ≈ 28.51% (Trade Brains) | Smaller company with strong numbers in its niche (paper manufacturing). | Smaller size means higher risk: market liquidity, business risk, sector constraints. |