Most retail investors in India jump into a stock after watching a YouTube video or reading one bullish tweet. It feels exciting for a few days… until the price falls 15% and nobody is around to explain what went wrong.
Fundamental analysis is how you avoid that.
Think of it as checking the health of the business before you buy a tiny slice of it. In this guide, we’ll go step by step, using simple language, and we’ll also see how you can speed up this process using free tools on Getaka like:
- Intrinsic Value Calculator
- Reverse CAGR Calculator
- Live stock-wise pages like the Fundamental Analysis of Infosys Ltd
Note: This article is for education, not buy/sell recommendations. Always do your own research or consult a SEBI-registered advisor.
1. Start with a simple question: “How does this company make money?”
Before you touch EPS, ROE or any fancy ratio, answer this in one line:
What problem does the company solve, and who pays them?
For example, if you open a page like “Fundamental Analysis of Infosys Ltd” on Getaka, you can quickly understand that Infosys earns money primarily from IT services and consulting for global clients, not from some one-time event or speculation.
👉 Check: Fundamental Analysis of Infosys Ltd
When you pick any stock:
- Read the business description (company website, annual report, or a fundamental analysis page on Getaka).
- Avoid businesses you don’t understand. If you can’t explain it to a friend in Hindi/English in two lines, skip it for now.
2. Look at growth: revenue and EPS, not just stock price
Stock price can jump 20% in a week without any real change in business. That’s noise.
What matters over the long term is:
- Revenue growth – Is sales growing consistently over 5–10 years?
- EPS growth (Earnings Per Share) – Is the company actually earning more per share?
On Getaka, most stock pages highlight key financial trends like revenue, profit and EPS over time, so you don’t have to manually dig every number.
When you see a chart:
- Prefer steady, compounding growth over “one year very high, next year collapse”.
- Avoid companies where EPS is highly volatile without a clear reason.
If you’re evaluating a stock target, don’t just dream of “₹1,000 by 2030”. First check whether:
- EPS is growing
- Profit margins are stable or improving
3. Check profitability & efficiency: ROE and ROCE
Once growth looks okay, check how efficiently the company uses shareholder money.
Two core ratios:
- ROE (Return on Equity) – Profit generated from shareholders’ money
- ROCE (Return on Capital Employed) – Profit generated from total capital (equity + debt)
Very roughly:
- ROE above 15% for several years is usually a good sign
- ROCE above 15% with low debt is often a sign of a quality business
On Getaka, when you open a stock’s fundamental analysis or screener output, you’ll usually see ROE and ROCE in one place so you can shortlist quickly instead of manually hunting in PDFs.
If ROE/ROCE is:
- Very high one year and very low the next: be cautious, understand why.
- High but only because of high debt, that’s a red flag.
4. Balance sheet strength: debt, interest coverage & safety
A company can show great profit, but if it’s drowning in debt, one bad cycle can wipe everything out.
Key things to check:
- Debt to Equity – lower is generally safer (industry-dependent)
- Interest Coverage Ratio – how comfortably it can pay interest from profits
On Getaka’s stock analysis pages and screeners, you’ll often see metrics around debt, interest coverage, and reserves vs borrowings, which give you a quick feel of how fragile or strong the balance sheet is.
Prefer companies where:
- Debt is manageable or reducing over time
- Interest coverage is comfortably above 2–3× (and ideally much more for stable businesses)
5. Valuation: P/E is not enough — think intrinsic value
Even a great company can be a bad investment if you overpay.
Most people stop at:
“P/E is lower than the sector, so it’s cheap.”
But valuation is deeper than that. You should think in terms of intrinsic value — a fair value estimate of what the business is worth, based on its future cash flows or earnings.
Use Intrinsic Value Calculator (Getaka)
Instead of manually running Excel models every time, you can use the Intrinsic Value Calculator on Getaka to:
- Input assumptions like EPS, growth rate, discount rate
- Get an estimated fair value per share
- Compare intrinsic value vs current market price
This helps you answer:
- “Am I buying this stock at a margin of safety?”
- “Is the stock price already pricing in aggressive growth?”
Use Reverse CAGR Calculator for realistic targets
Investors love “price target 2030” type headlines. But a practical way to think about it is:
“If I buy at today’s price and want X% return per year, what should be a realistic future price?”
For that, you can use the Reverse CAGR Calculator. It helps you:
- Set a target return (say 12–15% CAGR)
- Work backwards to see what kind of price target makes sense
This makes your share price targets more grounded, not just random numbers.
6. Use a stock screener to shortlist, then deep-dive
Instead of randomly picking names from social media, first create a shortlist using a value-oriented stock screener that focuses on fundamentals.
On Getaka, you can explore stock screener pages that filter companies by:
- Market cap
- P/E
- Dividend yield
- ROE, ROCE
- Debt levels
- EPS growth
You can use a screener to find:
- High-ROE, low-debt value stocks
- Consistent compounders
- Deep value opportunities with margin of safety
Then, for each shortlisted stock, open its dedicated fundamental analysis page (like you did for Infosys) and walk through the exact steps above: business → growth → profitability → balance sheet → valuation.
7. Connect fundamentals with realistic price targets
Once you’ve:
- Understood the business
- Checked revenue & EPS growth
- Verified ROE/ROCE
- Evaluated debt & safety
- Estimated intrinsic value
…you’re in a much better position to think about share price targets.
Here’s a simple way to combine Getaka tools:
- Visit the stock’s analysis page, e.g. Fundamental Analysis of Infosys Ltd.
- Use the Intrinsic Value Calculator to estimate fair value.
- Use the Reverse CAGR Calculator to see what future price aligns with your required return.
- Optionally, view the stock target page generated via Getaka’s tools (for example, similar to how Colab Cloud Platforms Ltd stock target pages are structured).
This way your “target price” is connected to fundamentals, not just a random round number.
8. Common mistakes to avoid in fundamental analysis
Even after having great tools, a few mistakes can ruin returns:
- Chasing multibagger stories without checking balance sheet and debt
- Ignoring cash flows and only looking at net profit
- Over-focusing on one ratio (like P/E) and ignoring others
- Blindly copying portfolios of others without matching your risk tolerance & time horizon
Fundamental analysis doesn’t guarantee profits, but it dramatically tilts the odds in your favour.
9. Final thoughts: Make a simple, repeatable process
You don’t need to be a CFA or full-time analyst.
You just need a repeatable checklist:
- Understand the business
- Check growth (revenue, EPS)
- Check profitability (ROE, ROCE)
- Check safety (debt, interest coverage, cash flows)
- Estimate intrinsic value and compare with current price
- Use tools like Getaka’s Intrinsic Value Calculator and Reverse CAGR Calculator to keep your expectations realistic
Whenever you open a new stock idea, open:
- A fundamental analysis page for that stock on Getaka
- The relevant calculators and stock target tools
…then calmly walk through your process.
Over time, this discipline — not hot tips — is what helps you build serious wealth from equities.