These 2 quality stocks haven't been this cheap in five years

Summary: High-quality stocks don’t stay cheap for long. Two such companies have slipped near their five-year lows but still score a perfect 10/10 on our Quality Score, meaning they boast solid capital efficiency and balance sheet strength. Find their names below.

The broader market may look calm from the vantage point of headline indices, but underneath, the churn is sharp. Several stocks have been sliding steadily, with many now hovering near multi-year lows. And that volatility sometimes creates an interesting hunting ground. If a fundamentally strong business happens to be trading at depressed levels, the mismatch can open a door for long-term investors.

To spot such names in the market, we turned to the Value Research Stock Screener and applied two sharp filters:

• Stocks trading within 5 per cent of their five-year low, and
• Those with the highest possible Quality Scores in our rating system.

From this universe, just two companies scored a perfect 10 out of 10 on quality—meaning they combine exceptional business efficiency with clean balance sheets.

Why is quality crucial in a falling market?

Because quality determines survival, resilience, and ultimately the ability to compound. Even when growth slows, high-quality businesses can protect returns through strong margins, high capital efficiency and tight working-capital discipline. And when the next upcycle arrives, these are usually the first to recover.

That’s the lens through which these two names deserve a closer look. But remember these are only ideas for deeper research and should not be considered our recommendations.

1) Sanofi India

Sanofi India is among the few pharmaceutical companies that have consistently delivered superior capital efficiency across cycles. Its return on equity and capital rarely slip, even in years of modest growth—a sign of a fundamentally strong franchise.

Its quality is unmistakable. Where it struggles, however, is growth. Revenue has declined around 8 per cent annually over the last five years (as of December 2024) and profitability has followed that trend. The business remains efficient but not fast-growing.

• Debt-to-equity: 0
• Quality Score: 10/10
• P/E: 28.43 times

2) Bata India

Bata India, one of the country’s most recognisable consumer brands, is facing a similar trend: solid balance sheet quality paired with sluggish demand recovery in its core categories. Its premium product line-up, especially, is taking time to scale with low volume offtake.

Even so, the company remains capital-efficient with a five-year average return on capital (ROCE) of 23 per cent. The company has the balance sheet and brand strength to endure a slow patch. What it lacks, for now, is volume acceleration.

• Debt-to-equity: 0
• Quality Score: 10/10
• P/E: 75.83 times

Want to find high-quality stocks before others do? 

Screens can highlight interesting names but finding truly investment-worthy businesses at the right price needs deeper work. When quality companies slip to multi-year lows, the real question is whether the fundamentals still justify conviction. That’s exactly where Value Research Stock Advisor helps.

Our analysts study businesses inside-out—balance sheets, management behaviour, long-term profitability, capital allocation—and filter out companies where quality is an illusion.

We highlight only those that meet our long-term investing framework and are backed by strong financials, durable moats and rational valuations.

As a subscriber, you get:

• Clear buy/sell/hold guidance on carefully researched stocks
• Timely updates and clear guidance when conditions change
• Easy-to-follow portfolios crafted for different risk profiles

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