Investing in Indian Stock Market

 Investing in Indian Stock Market 

Steps that help you to invest in the Indian stock market:

Screening and filtering the right stocks using financials- Stock screening involves searching for companies that meet specific financial criteria. Value investors will not buy stocks of even the biggest of companies till their financial health is acceptable

Select the companies that you understand- It is important that you invest in companies that you understand. Spend time studying the company and its sector.

Look for companies with sustainable Moat- In business Moat means companies that have a competitive advantage. Companies with moats are sort of monopolies and it's difficult to compete with them. For example- Maggi has a strong brand name.

Find low debt level companies- Debt-free businesses have numerous advantages and are a solid investment option. Debt-free businesses are unaffected by a slowing economy. These companies can provide superior returns.

Financial ratios- Two financial ratios that help in selecting the right stocks are return on equity (RoE) and return on capital employed (RoCE). These ratios help in understanding how profitable a company is in terms of investments and how efficiently it is using its resources.

Find the right price- Buying the stock at the right price would give a margin of safety, protecting your investment from downside risk. Monitor the stock so that when the opportunity arrives you can grab it immediately.

Management- It is important that the company you plan to invest in is run by honest, transparent and competent management.