Five fundamentally strong stocks down nearly 40% in the past one year

This serves as a reminder of how important a solid foundation is, whether in construction or investing. In the case of a portfolio, that foundation is built on fundamentally strong stocks—companies with sound financials and steady long-term potential.

Interestingly, recent market volatility has brought down the share prices of several such companies, in some cases by up to 40%. For long-term investors, this presents a golden opportunity. Here are five such fundamentally strong stocks to watch out for.

These stocks have been handpicked using Equitymaster’s Stock Screener - Fundamentally strong stocks in India.

#1 Astral

Astral, previously calledAstral Poly Technik manufactures plumbing and drainage systems in India. The company manufactures and sells a range of products including pipes, water tanks, faucets, and sanitaryware.

These products cater to both residential and industrial plumbing and drainage systems.It has also forayed into adhesive business over the years.

In the past one year, its shares have declined 40%, falling from ₹2,215.5 to ₹1,339.8 as of intraday trade on 12 May 2025.

The quarterly performance of the company has remained largely flat to weak over the past three quarters, which may have contributed to the recent decline in its stock price. Revenue showed only modest year-on-year growth, 7.8% in Q1 FY25, 0.5% in Q2, and 2% in Q3.

The net profit trend has been more concerning. In particular, net profit remained almost unchanged in Q1, declined sharply by 17.5% in Q2, and dipping slightly by 0.5% in Q3.

Going forward, Astral is focusing on expanding its PTMT product range and infrastructure pipe capacity, while also strengthening its presence in the valve segment.

#2 Tata Technologies

The company is a global leader in engineering and product development services. It offers solutions in areas such as design, engineering, manufacturing, and IT services for industries like automotive, aerospace, and industrial machinery, helping companies innovate and enhance their operations. It's a subsidiary ofTata Motors.

Over the past year, the company’s shares have declined 32%, dropping from ₹1,021 to ₹695.7 as of intraday trade on 12 May 2025.

The fall is partly due to Tata Technologies’ heavy reliance on the automotive sector, which is facing global headwinds.

Regulatory uncertainties in the US and Europe, slowing EV adoption, and cost-cutting by automakers have led to delays in R&D and engineering outsourcing, impacting the company’s growth prospects.

Additionally, mutual funds have been reducing their stake in the company. Their holding dropped from 2.4% in September 2024 to 1.9% in December 2024 quarter, and further declined to 1.25% in March 2025.

Another factor weighing on sentiment is a recent block deal in April 2025, where around 16 million shares (3.94% stake) changed hands on the NSE.

As per news reports, TPG Rise Climate sold 15.86 m shares in the price range of ₹670 to ₹698.5 — a discount of 1-5% from the stock’s closing price on 28 April.

Going forward, the company plans to focus on faster product launches.

#3 ABB India

The company is an integrated power equipment manufacturer. ABB India is a subsidiary of ABB Ltd.

It provides a complete range of engineering, products, solutions and services in areas of automation and power technology.

Over the past year, shares of the company have declined by around 32%, falling from ₹7,984 to ₹5,476 as of intraday trade on 12 May 2025.

The drop in stock price can be attributed in part to the company’s post-earnings call in November 2024, where management shared a cautious outlook on order inflows and execution challenges.

While order inflows for the quarter stood at ₹33.4 bn, up 11% YoY, the figure fell short of analyst expectations.

The management also highlighted that despite order inflows in the range of ₹2,500–3,000 crore, achieving ₹4000 crore remains difficult.

The slower conversion from order booking to revenue was attributed to the larger size of recent orders, which require longer execution timelines compared to smaller base orders.

Another factor behind the decline is consistent FII selling.

Foreign institutional investors trimmed their stake from 12.35% in September 2024 to 11.8% in December 2024, followed by a further drop to 10.3% in the March 2025 quarter.

Going forward, the company plans to expand its presence in the Indian market to drive future growth.

#4 Adani Total Gas

The company is engaged in city gas distribution (CGD) business and supplies natural gas to domestic, commercial, industrial and vehicle users.

It ventured into e-mobility and biomass businesses through subsidiaries - Adani TotalEnergies E-mobility and Adani TotalEnergies Biomass. It has also formed a 50:50 joint venture for its gas meter manufacturing business.

It’s actively engaged in expanding its presence in the electric vehicle (EV) charging with an installed capacity of 6.6 MW across 329 charging points spread across 10 states in India. Additionally, it has over 1,050 charging points under construction.

Over the past year, shares of Adani Total Gas have fallen about 27%, dropping from ₹861 to ₹629 as of intraday trade on 12 May 2025.

One of the reasons for the decline can be attributed to corporate governance concerns stemming from the Hindenburg saga. The Adani Group denied Hindenburg’s allegations.

Another factor weighing on the stock is two consecutive weak quarterly results. In the December 2024 quarter, revenue rose 12.6% but net profit fell sharply by 19.45%, which disappointed the street.

In the March 2025 quarter, revenue increased 15.5% but net profit declined 8% to ₹150 crore. In FY25, the company's standalone revenue from operations rose 12% YoY to ₹5,400 crore, driven largely by higher volumes in the CNG segment. However, profit after tax dipped 1% to ₹650 crore, adding to the pressure on the stock.

Going forward, the company plans to expand its CNG and LNG infrastructure, invest in EV charging stations, and diversify into fuel retail to support future growth.

#5 IRCTC

Indian Railway Catering and Tourism Corp (IRCTC), which was listed in October 2019, is a strong monopoly stock. It’s the only entity authorised by Indian Railways to offer online railway tickets. The company also enjoys a monopoly in packaged drinking water. It's the only entity authorised by the ministry of railways to manufacture and distribute packaged drinking water at all railway stations and trains under the Rail Neer brand.

IRCTC has also entered into other digital services, such as online hotel bookings and air ticketing. Over the past year shares of IRCTC have declined over 22%.

The steady decline in institutional holdings over the past few quarters appears to be one of the key reasons behind the fall in the stock price.

Mutual fund ownership in the company has dropped consistently—from 3.9% in June 2024 to 2.8%

in March 2025. Similarly, foreign institutional investors (FIIs) trimmed their stake from 7.8% to 7.4% during the same period.

Another reason for the fall is the lack of fresh triggers in the Union Budget 2025, with railway allocation unchanged at ₹2.6 trillion.

Going forward, the company plans to improve its digital infrastructure.

Conclusion

Investing in fundamentally strong stocks at discount can be a smart long-term strategy. It increases the possibility of long-term returns by providing an opportunity to purchase high-quality companies at a reduced price.

For patient investors, these declines frequently offer alluring buying opportunities, particularly when the decline is brought on by short-term headwinds or general market sentiment rather than structural problems with the business.

However, there's a chance that the drop is a reflection of more serious problems or ongoing industry challenges, which could postpone recovery.

Therefore, careful research is necessary before making an investment to make sure the company's foundation is sound and its prospects for the future are still bright.

Investors should evaluate the company’s fundamentals, corporate governance, and valuations of the stock as key factors when conducting due diligence before making investment decisions.

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