Basic Stock Market Fundamental Analysis for Beginners

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There are over 5000 companies in India, which are listed in the stock market, however, to our surprise there are hardly over 100 to 200 companies are reliable and trustworthy, from the perspective of the investor. The new stock investor is entirely a layman though he or she reads and explores many things about the stock market until he or she invests in the stock exchange. It is because our education system does not support any practical information and is quite limited to providing theoretical knowledge.

Though our education system limits us to theoretical knowledge, thanks to the vast world of internet, where anything and everything can be explored and learnt. Now, here in this discussion, we will see the basic fundamental analysis of the stock market, especially for the new investor of the stock exchange. So, what all the investor has to keep in mind when considering a company to invest in its stocks?

Debt Analysis

The first and foremost struggling factor for the company is the debt, taken from the banks and maybe from the other investors for the capital. Initially, any company experiences many struggles to come to the break-even, where all the investment spent by them comes back showing no loss and no profit, by then. If the company has made enormous debt, the company initially struggles a lot. So, the company with zero debt or little debt is to be considered as a typical and less-risky company, in the economic point of view. It is very easy for the company with huge debts to get into risks when the price goes down, revenue goes down.

Brand Value Analysis

As we have seen before, though there are thousands of companies that are listed in the stock market, there are only hundreds of businesses that are reliable and trustworthy. So, it is always healthy for the investor to consider the company, which has a brand value analysis. The question is how to do the brand value analysis? Go with the enterprises that are better familiar with the names.

Profit Growth Analysis

Another essential factor to consider before choosing the right company to invest in the stocks is the profit or revenue growth analysis. We always look for stable enterprises and the stability of the enterprise can be spelt by its consistent performance in the last five years, regarding its revenue.


After we come to shortlisted companies, which get through the debt analysis and reputed brand value and consistent profit growth in the last five years, another important aspect is its competition with the competitors. For example, Horlicks has very less competition, in the health drink industry, when compared to the cement companies, which has over 20 competitors, in the current industry.

These are the critical four factors that a new investor has to consider so that he or she can shortlist a big list of companies in the stock market into a double-digit number and still filter the menu to select the single-digit number of enterprises.