How To Use Finviz Stock Screener For Indian Stocks

Finviz is a powerful, free stock screener that provides a wealth of information for investors. While primarily focused on US markets, with a few clever adjustments, you can effectively use Finviz to screen for Indian stocks and identify potential investment opportunities. This guide will walk you through the steps, limitations, and considerations for using Finviz for the Indian stock market.

Keep in mind that Finviz doesn't have direct, comprehensive coverage of the Indian stock market (NSE and BSE). This means you'll need to use a combination of Finviz's features and external sources to get the most accurate and relevant data. Let's dive in!

1. Understanding Finviz Limitations for Indian Stocks

Before we start, it's crucial to acknowledge the limitations:

  • No Direct Indian Stock Exchange Filter: Finviz doesn't have a specific filter for "NSE" or "BSE" (the National Stock Exchange and Bombay Stock Exchange of India).
  • Limited Fundamental Data: Fundamental data for Indian companies might be less comprehensive than for US companies.
  • Currency Differences: Financial data is typically displayed in USD, requiring you to convert it to INR for accurate analysis.
  • Data Delays: Real-time data for Indian stocks is unlikely. Expect some delays.

Despite these limitations, Finviz can still be a valuable tool for initial screening and generating investment ideas.

2. Leveraging ADRs and Global Companies

The most straightforward way to use Finviz for Indian stocks is to focus on companies that have American Depositary Receipts (ADRs) listed on US exchanges. An ADR represents shares of a foreign company held by a U.S. depositary bank, allowing U.S. investors to trade them more easily.

  • Screening for ADRs: Use the "Exchange" filter and select "NYSE" or "NASDAQ." Then, use the "Country" filter and select "India." This will give you a list of Indian companies that have ADRs listed in the US.

  • Example: Companies like Infosys (INFY) and Wipro (WIT) have ADRs listed on the NYSE. You can easily find them using this method.

3. Using Industry and Sector Filters Strategically

Even if a company doesn't have an ADR, you can still use Finviz's industry and sector filters to find companies operating in industries relevant to India's economy.

  • Identify Key Sectors: Think about sectors that are growing in India, such as IT, pharmaceuticals, consumer goods, and finance.
  • Use Industry Filters: In Finviz, use the "Industry" filter to select relevant industries. For example, you could select "Software - Application" or "Drug Manufacturers - Major."
  • Research Companies: Once you have a list of companies in these industries, research whether they have significant operations or exposure to the Indian market. You'll need to use external sources like company websites, news articles, and financial reports to determine this.

4. Filtering by Market Capitalization and Price

Finviz's market capitalization and price filters are universally applicable, regardless of the stock's origin. Use them to narrow down your search based on your investment preferences.

  • Market Cap: Filter by market capitalization (e.g., "Large," "Mid," or "Small") to focus on companies of a particular size. This can help you align your screening with your risk tolerance and investment strategy.
  • Price: Filter by price range to find stocks within your budget.

5. Analyzing Financial Ratios and Fundamentals

Finviz provides a range of financial ratios that can be used to assess a company's financial health and valuation. However, remember that data for Indian companies might be less comprehensive.

  • Key Ratios: Focus on key ratios like Price-to-Earnings (P/E), Price-to-Book (P/B), Debt-to-Equity (D/E), and Return on Equity (ROE).
  • Industry Comparisons: Compare these ratios to industry averages to see how a company stacks up against its peers.
  • Be Cautious: Verify the accuracy of the data with other sources, especially for companies without ADRs. The data might be outdated or incomplete.

6. Technical Analysis with Finviz Charts

Finviz's charting tools can be used to perform technical analysis on stocks, regardless of their location.

  • Chart Patterns: Look for chart patterns like head and shoulders, double tops/bottoms, and triangles.
  • Moving Averages: Use moving averages to identify trends and potential support/resistance levels.
  • Technical Indicators: Experiment with technical indicators like RSI (Relative Strength Index) and MACD (Moving Average Convergence Divergence) to identify overbought/oversold conditions and potential buy/sell signals.

7. Combining Finviz with External Resources

Since Finviz's coverage of Indian stocks is limited, it's essential to supplement your research with external resources.

  • Company Websites: Visit the company's investor relations page for financial reports, presentations, and news releases.
  • Financial News Websites: Use reputable financial news websites that cover the Indian stock market, such as The Economic Times, Business Standard, and Livemint.
  • Brokerage Platforms: Your brokerage platform may provide more detailed information on Indian stocks, including real-time data and analyst reports.
  • SEBI Website: The Securities and Exchange Board of India (SEBI) website provides regulatory information and filings for Indian companies.

8. Example Scenario: Finding Potential IT Stocks in India

Let's say you're interested in finding potential IT stocks in India. Here's how you can use Finviz:

  1. Industry Filter: Select "Software - Application" or "Information Technology Services" in the Industry filter.
  2. Country Filter: If you're looking for ADRs, select "India" in the Country filter and "NYSE" or "NASDAQ" in the Exchange filter. If not, skip this step.
  3. Market Cap Filter: Choose a market cap range that aligns with your investment preferences (e.g., "Mid" or "Large").
  4. Financial Ratios: Examine key financial ratios like P/E, P/B, and ROE to identify companies that are potentially undervalued or have strong profitability.
  5. External Research: Research the companies you find on their websites and financial news websites to learn more about their operations, growth prospects, and competitive landscape in India.

9. Important Considerations and Risks

  • Currency Risk: Investing in Indian stocks exposes you to currency risk, as fluctuations in the INR/USD exchange rate can impact your returns.
  • Political and Economic Risk: India's political and economic environment can impact the performance of its stock market.
  • Regulatory Risk: Changes in regulations by SEBI can affect the investment landscape.
  • Liquidity Risk: Some Indian stocks may have lower trading volumes, making it difficult to buy or sell shares quickly.

Conclusion: A Starting Point, Not the Finish Line

Finviz is a valuable tool for generating investment ideas and performing initial screening, even for Indian stocks. By understanding its limitations and supplementing your research with external resources, you can effectively use Finviz to identify potential investment opportunities in the Indian stock market. Remember to always conduct thorough due diligence before making any investment decisions, considering the specific risks associated with investing in emerging markets like India. Finviz can be a helpful starting point, but it's crucial to go beyond the screener and do your homework. Good luck!