As short-term or long-term investors, we constantly work to protect our money from potential market risks, and we constantly imagine a world in which the market will be without risk. If that occurs, it will be a blessing for all of the market’s participants and will greatly increase interest in trading and investing among all individuals.
“Risk” is a word that has huge value in the stock market. Whether you are a short-term trader or a long-term investor, every market participant has to take some kind of risk in order to be profitable in the market. As many young investors or traders are inculcating this principle of risk before entering the stock market through various movies and quotes such as the popular quote from the 1992 movie scam, “Risk hai toh Ishq hai” it has made the new market participant aware of the underlying risk.
So, in order to minimize the risk of investors to a great extent let’s have a look at some best low risk high return stocks.
Top 10 Low risk and High return stocks
1. Laurus Labs
Laurus Labs is a fully integrated pharmaceutical and biotechnology firm. In order to meet the needs of the global pharmaceutical industry, Laurus Labs primarily provides a broad and integrated portfolio of Active Pharmaceutical Ingredients (API) including intermediates, Generic Finished Dosage Forms (FDF), and Contract Research services.
| Market Cap.(Rs) | 170.699B |
| Dividend yield(%) | 0.88 |
| Beta (5y monthly) | 1.27 |
| EPS(Rs) | 17.02 |
2. Ksolves India Ltd.
Ksolves India Ltd, founded in 2014, specializes in software development, enterprise solutions, consulting, and providing IT solutions to businesses in industries such as real estate, e-commerce, finance, telecommunications, and healthcare. Ksolves curates and develops the best software solutions available. With 410+ in-house technology experts, it serves clients in multiple counties.
| Market Cap.(Rs) | 5.058B |
| Dividend yield(%) | 3.49 |
| Beta (5y monthly) | 0.67 |
| EPS(Rs) | 18.25 |
3. High Energy Batteries(India) Ltd.
High Energy Batteries (India) Limited manufactures Hi-Tech batteries for use in Army, Navy, Airforce, and Launch Vehicles, as well as commercial batteries for Auto and Standby VRLA applications. As of December 2021, the company is the sole supplier of silver-zinc batteries to the Indian navy defense, with a market share of 65%-70%.
| Market Cap.(Rs) | 621.733M |
| Dividend yield(%) | 0.87 |
| Beta (5y monthly) | N/A |
| EPS(Rs) | 8.05 |
4. Refex Industries Ltd.
Refex Industries Limited (RIL) is a specialist manufacturer and re-filler of refrigerant gases that are chlorofluorocarbon replacements. The company has ash procurement facilities in Chhattisgarh, Maharashtra, and Rajasthan, as well as a re-filling facility in Thiruporur, Tamil Nadu, and a solar power plant in Barmer, Rajasthan.
| Market Cap.(Rs) | 5.911B |
| Dividend yield(%) | 0.00 |
| Beta (5y monthly) | 2.34 |
| EPS(Rs) | 41.92 |
5. M K Exim(India) Ltd Finance
M.K. Exim (India) Ltd is in the textile and fabric manufacturing business. It has also ventured into cosmetic product distribution. It includes the distribution of internationally renowned brands’ cosmetic products, which include personal care and hygiene products. The Company has launched a new product – K18-Peptide to treat hair fall and damage. It plans to launch the product in 5000 salons across India in FY22.
| Market Cap.(Rs) | 614.292M |
| Dividend yield(%) | 0.00 |
| Beta (5y monthly) | 0.67 |
| EPS(Rs) | 5.81 |
6. Cigniti Technologies Ltd.
Cigniti Technologies Ltd provides quality engineering and software testing services to clients in a variety of industries. It was founded in Hyderabad, Telangana, in 1998. Quality Assurance, Next Generation Testing, Digital Assurance, Quality Engineering, Advisory & Transformation, IP & Innovation, and other services are provided by the company.
| Market Cap.(Rs) | 19.342B |
| Dividend yield(%) | 0.35 |
| Beta (5y monthly) | 0.27 |
| EPS(Rs) | 51.65 |
7. Caplin Point Laboratories
Caplin Point Laboratories Ltd is a company that manufactures and sources APIs, finished formulations, R&D, and clinical research in Latin America, Africa, the United States, and other countries. The company operates on a low-asset model, sourcing 60% of its products from various partners in India and China. The remaining 40% of products are manufactured by the company’s manufacturing plants, which are mostly located in India.
| Market Cap.(Rs) | 50.771B |
| Dividend yield(%) | 0.60 |
| Beta (5y monthly) | 0.37 |
| EPS(Rs) | 46.19 |
8. Likhita Infrastructure Ltd.
Likhitha Infrastructure Limited is in the business of laying pipelines by offering full-service installation, testing, and commissioning of oil and gas pipelines, as well as projects for city gas distribution and operation and maintenance (O&M).
| Market Cap.(Rs) | 9.105B |
| Dividend yield(%) | 0.52 |
| Beta (5y monthly) | 0.66 |
| EPS(Rs) | 13.68 |
9. R Systems International Ltd.
R Systems is a technology, artificial intelligence, analytics, and knowledge services provider. It collaborates with customers to enable or elevate their digital transformation by providing a wide range of digital services such as product engineering, cloud enablement, quality assurance testing, and digital platforms and solutions.
| Market Cap.(Rs) | 30.037B |
| Dividend yield(%) | 4.81 |
| Beta (5y monthly) | 0.18 |
| EPS(Rs) | 11.81 |
10. Cybertech Systems & Software Ltd.
Cybertech Systems and Software Ltd offers information technology services to customers primarily in the United States and India, with a focus on next-generation geospatial, networking, and enterprise IT solutions. It provides services to all major industries, including government, education, utilities, public safety and homeland defence, technology, telecommunications, retail, healthcare, and manufacturing.
| Market Cap.(Rs) | 3.558B |
| Dividend yield(%) | 1.20% |
| Beta (5y monthly) | 1.04 |
| EPS(Rs) | 7.53 |
The Essentials of Safe Investing
There are certain points that need to be focused on before investing in any stock.
Growth and Profitability: The first and foremost thing an investor should check out is the growth and profitability of the stock. If the stock is achieving consistent growth along with its net profit margins, then it passes this test.
Dividend Yield: The second thing that investors must look at is the dividend yield of the company. If the stock is providing consistent growth in dividends throughout the financial years, then it is eligible to be on your list.
Free Cash Flow Test: This determines the operational efficiency of the company. The investor should assess the CFO/PAT ratio of the company. which assesses the company’s ability to generate cash with respect to its net profit margins.
Price Lower than Intrinsic Value: An investor should prefer stocks whose price is lower than their intrinsic value. As such, stocks have a higher probability of price growth. It is the source of value investing.
Conclusion
Investors could increase their profits by investing in stocks that offer a higher return on investment compared to their risk. Because such stocks, even if they fail to meet investor expectations, will not cause significant harm in terms of capital invested, As many renowned investors such as Warren Buffet, Benjamin Graham, etc. have stated, the success of an investment is not determined by its profitability but by its ability to cut down the associated risk.
