Step 1 - Universe. Start from an index or collection (say, Nifty 500 or our defence list), not the whole market. Boundaries beat infinity.

Step 2 - Quality filter. Keep ROCE > 15%, positive operating cash flow, debt-to-equity < 1. This typically cuts two-thirds of names - correctly.

Step 3 - Price filter. Of survivors, keep P/E below sector median or PEG below 1.5. Quality you overpay for is just expensive quality.

Step 4 - Momentum sanity. Prefer stocks above their 200-day average with rising volumes; downtrends need turnaround evidence, not hope. Check 52-week position.

Step 5 - Story check. Read the last two concalls of the 10 survivors. One hour here saves lakhs: management evasion, auditor exits or pledged shares disqualify instantly.

Do this now: run the five steps on any collection page's stock table and save survivors as a tagged watchlist portfolio. Re-screen quarterly - screens rot as prices move.

Frequently asked questions

How often should I re-screen?

Quarterly, after results season. Prices move daily but fundamentals print quarterly - match the cadence to the data.

Practice on live markets.

Apply this lesson inside Ticker Screener — real prices, real ratios, zero brokerage login needed.

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Next in this track

P/E, ROCE, ROE and P/B in 10 minutes

The only four ratios beginners need: what each measures, good vs bad values, and the two-minute combo that filters any stock.

Go deeper

ROCE

Return on capital employed: how efficiently a company turns invested money into profit. Above 15–20% signals quality.

P/E Ratio

Price-to-earnings: what you pay for each rupee or dollar of yearly profit. The starting lens for cheap vs expensive.

52-Week High / Low

A stock's highest and lowest price over the past year. Breakouts signal strength; breakdowns signal trouble - both demand volume proof.

Market Cap

Price times shares outstanding: the market's price tag for the whole company. Defines large, mid and small caps.

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