Top Fastest Growing Stocks in India: How to Identify, Benefits, Risks, And More

Last Updated on Jul 15, 2024 by Anjali Chourasiya

Investing in growth stocks can be an effective way to enhance your portfolio, particularly if you are aiming for long-term capital appreciation. When you look at growth stocks in India, you are likely seeking companies that show significant potential for future expansion. In this article, we will delve into what growth stocks are, the features of high growth stocks, and the factors you might consider when selecting the fastest growing stocks in India.

What are Growth Stocks?

Growth stocks are shares in companies that are expected to grow at an above-average rate compared to other companies in the market. These companies typically reinvest their earnings into business expansion, research, and development rather than paying out dividends. For those interested in growth stocks India has a vibrant market with many promising opportunities.

Top Fastest Growing Stocks in India – Updated July 2024

Note: The list of best growing shares in India is taken from a pre-built screen, ‘Growth Bargains’ from the Tickertape Stock Screener. The data is of 13th July 2024.

Please note that these stock selection criteria and the stocks are provided for informational purposes only; it is essential to conduct your own research.

🚀 Pro Tip: Use Tickertape’s Portfolio Analysis to assess your investment portfolio’s diversification and performance.

Discover Innovative Investment Strategies with smallcases! 

Did you know that you can invest in readymade stock portfolios managed by SEBI-registered experts?

But first, what exactly is a smallcase? 

What is a smallcase? 

smallcases are modern investment products that help investors build low-cost, long-term & diversified portfolios with ease. A smallcase is a basket or portfolio of stocks/ETFs representing an idea – an objective, theme, or strategy. They are created and managed by SEBI-registered experts. 

With over 500 smallcases to choose from, here are some of the most popular smallcases you can check out: 

Equity & Gold smallcase by Windmill Capital

Top 100 Stocks smallcase by Windmill Capital

All Weather Investing smallcase by Windmill Capital

Note: The smallcases are mentioned only for educational purposes and are not meant to be recommendatory. Investors must conduct their own research and consult a financial expert before making any investment decisions.

Disclosures for aforementioned smallcases

Overview of the 10 Best Growth Companies in India 

Caplin Point Laboratories Limited

Founded in 1990, Caplin Point Laboratories Limited is a prominent pharmaceutical company with a diverse product portfolio spanning key segments like antibiotics, non-steroidal anti-inflammatory drugs (NSAIDs), ophthalmics, pain management, and anti-ulcers. The company has a robust market capitalisation of Rs. 11,547.48 cr., and is considered significantly more volatile than the broader Nifty index, with a stock volatility of 3.07x. 

As of 13th July 2024, Caplin Point Laboratories Ltd has a market capitalisation of Rs. 11,547.48 cr., and a closing price of Rs. 1,519.20. Over the past five years, the company has shown significant growth with a 5-year average Return on Equity (ROE) of 25.81%, a historical revenue growth of 21.41%, and a historical Earnings Per Share (EPS) growth of 20.85%. Additionally, the company’s operating cash flow growth over the same period has been 32.48%. The PE ratio is 25.26, with a PE premium vs sector of -43.57%. Learn more about it here!

Marksans Pharma Ltd

Founded in 2001, Marksans Pharma Ltd is an Indian pharmaceutical company that has experienced notable growth in its field. The company develops, manufactures, and markets generic formulations and active pharmaceutical ingredients. Marksans Pharma Ltd has a diverse product portfolio spanning key segments like anti-diabetics, antidepressants, anti-psychotics, and cardiovascular drugs.

The company has a market capitalisation of Rs. 8,572.05 cr. Marksans Pharma has delivered a strong financial performance, with a 5-year average ROE of 20.08%, a historical revenue growth of 17.27%, and a historical EPS growth of 29.94%. The company’s operating cash flow growth over the past five years has been 36.51%. Further, over the last 5 yrs, the market share of the company has increased from 0.44% to 0.61%. However, the stock is 3.70x as volatile as Nifty. Learn more about the stock’s performance here.

Utkarsh Small Finance Bank Ltd

Founded in 2016, Utkarsh Small Finance Bank Ltd is a leading small finance bank in India, providing a range of banking and financial services to underserved and unbanked segments of the population. The bank has a strong presence in northern and eastern India, with a focus on micro-lending, small and medium enterprises (SMEs), and affordable housing.

Utkarsh Small Finance Bank has a market capitalization of Rs. 5,614.56 cr. The bank has demonstrated robust financial performance, with a 5-year average ROE of 15.41%, a historical revenue growth of 30.68%, and a historical EPS growth of 26.24%. The bank’s operating cash flow growth over the past five years has been 36.27%. The stock is 3.31x as volatile as Nifty. Learn more about it here.

GMM Pfaudler Ltd

Established in 1962, GMM Pfaudler Ltd is a leading manufacturer of engineered equipment and systems for the chemical, pharmaceutical, and other process industries. The company’s product portfolio includes glass-lined equipment, filtration systems, and engineered-to-order solutions.

GMM Pfaudler has a market capitalization of Rs. 6,550.72 cr. The company has delivered a strong financial performance, with a ROE of 19.64%, a historical revenue growth of 46.65%, and a historical EPS growth of 28.10%. The company’s operating cash flow growth over the same period has been 22.22%. The stock is 2.29x as volatile as Nifty. Find more information about it here.

Jindal Stainless Ltd

Founded in 1970, Jindal Stainless Ltd is a leading manufacturer of stainless steel products in India. The company’s product portfolio includes stainless steel flat products, long products, and specialty products, catering to a diverse range of industries such as automotive, construction, and consumer durables.

Jindal Stainless has a market capitalisation of Rs. 64,499.63 cr. The company has delivered a strong financial performance, with return on equity (ROE) of 17.45%, a historical revenue growth of 23.28%, and a historical earnings per share (EPS) growth of 61.80%. Additionally, the company’s operating cash flow growth over the same period has been 16.34%. Jindal Stainless Ltd has a PE ratio of 23.77 and a PE premium vs sector of -26.99%. Learn more about its performance here.

Ajanta Pharma Ltd

Founded in 1973, Ajanta Pharma Ltd is a pharmaceutical company that develops, manufactures, and markets generic formulations and active pharmaceutical ingredients (APIs). The company has a diverse product portfolio spanning key segments like antimalarials, anti-infectives, and cardiovascular drugs.

Ajanta Pharma has a market capitalisation of Rs. 27,498.41 cr. The company has delivered a strong financial performance, with 5-year average return on equity (ROE) of 21.32%, a historical revenue growth of 15.64%, and a historical earnings per share (EPS) growth of 17.16%. Over the last 5 yrs, the market share of the company has increased from 0.92% to 1.17%. Learn more about it here.

Indraprastha Gas Ltd (IGL)

Indraprastha Gas Limited (IGL) is a city gas distribution company that primarily engages in the sale of natural gas. Established in 1998, IGL is one of the leading players in the Indian natural gas distribution market, serving the National Capital Region (NCR) of Delhi, Noida, Greater Noida, Ghaziabad, Rewari, Gurugram, and Karnal. The company’s market capitalisation is Rs. 36,785.04 cr.

IGL has demonstrated strong financial performance, with ROE of 21.95%, a historical revenue growth of 19.55%, and a historical earnings per share growth of 18.71%. The company’s operating cash flow growth over the same period has been 20.46%. IGL has also increased its market share from 5.53% to 7.39% over the past 5 years. Learn more about it here.

Apar Industries Ltd (APAR)

Apar Industries Limited is a diversified industrial conglomerate that operates in the manufacturing of conductors, transformer/specialty oils, and power/telecom cables. Established in 1958, the company has a strong presence in the Indian and global markets. APAR has a market capitalisation of Rs. 34,822.92 cr.

Apar Industries has demonstrated robust financial performance, with (ROE) of 16.89%, a historical revenue growth of 15.27%, and a historical earnings per share (EPS) growth of 42.93%. The company has also increased its market share from 14.37% to 18.4% over the past 5 years. During the same period, the net income of the company has grown at a yearly rate of 43.4%, vs the industry average of -4.83%. Learn more about it here.

Praj Industries Ltd (PRAJ)

Founded in 1983, Praj Industries Ltd is a leading global engineering and solutions provider in the bioenergy, brewery, and water sectors. Founded in 1983, the company has a strong presence in India and international markets, serving customers across North America, South America, Europe, Africa, and Asia-Pacific. The company’s market capitalisation is Rs. 13,303.47 cr.

Praj Industries has demonstrated consistent financial performance, with return on equity of 17.18%, a historical revenue growth of 24.61%, and a historical EPS growth of 32.66%. The company’s operating cash flow growth over the same period has been 43.31%. Further, the market share increased from 14.37% to 18.4% during the same period. The stock is 3.26x as volatile as Nifty. Learn more about it here.

Route Mobile Ltd (ROUT)

Founded in 2004, Route Mobile Limited is a cloud communication platform service provider, offering a range of solutions in the areas of messaging, voice, email, SMS, and omnichannel communication. Established in 2004, the company has a global presence, serving customers across various industries, including telecom, banking, financial services, and e-commerce.

Route Mobile has a market capitalisation of Rs. 11,145.28 cr. The company has demonstrated impressive financial performance, with a 5-year average return on equity (ROE) of 23.01%, a historical revenue growth of 36.78%, and a historical earnings per share (EPS) growth of 39.41%. The company’s operating cash flow growth over the past five years has been 21.11%. Route Mobile Ltd has a PE ratio of 29.71 and a PE premium vs sector of -12.41%. The stock is 2.33x as volatile as Nifty. Learn more about it here.

How to Identify the Best Growth Stocks for the Next 10 Years in India?

Identifying the best growth stocks for the next 10 years in India requires careful analysis and understanding of various factors. Here are some steps you might consider:

1. Research Industry Trends: Looking into the industries that are expected to grow significantly over the next decade can be a good start. Sectors such as technology, healthcare, and renewable energy are currently showing strong growth potential.
2. Evaluate Company Financials: Analysing a company’s financial statements can give you insights into its growth prospects. You can look at revenue growth, profit margins, and historical performance to assess its financial health.
3. Assess Market Potential: Considering the market potential for the company’s products or services can be helpful. Companies with large addressable markets and innovative solutions are likely to offer better growth opportunities.
4. Review Management Quality: The quality and track record of a company’s management team can significantly impact its growth trajectory. Strong leadership can drive successful growth strategies and execution.
5. Use Analytical Tools: Utilising Tickertape Stock Screener can help you filter and identify stocks based on specific growth criteria. It allows you to analyse various financial metrics and compare stocks within the same sector. Try it out now!

How to find the best growth stocks easily?

Alternatively, you can use a pre-built screen to find growth stocks quickly!

With a pre-built screen, you can conduct a thorough analysis within minutes. For instance, to get growth stocks, Tickertape gives you a pre-built screen called ‘Growth Bargains’. With one click, you will get a comprehensive list of high growth stocks based on following filters:

Market Cap: The market cap of companies allows you to focus on companies of a certain size, whether you’re looking for established large-cap companies or emerging small-cap opportunities.

5-Year Average Return on Equity (ROE): A company’s 5-yr average ROE identifies companies that consistently generate impressive returns on their shareholders’ equity. It also highlights companies with a track record of efficiently utilising their capital to generate profits.

5-Year Historical Revenue Growth: The historical revenue growth identifies companies that have experienced consistent revenue expansion, indicating their ability to capture market share and drive top-line growth.

5-Year Historical EPS Growth: A company’s 5-yr historical EPS growth is an essential metric that is used to identify companies that have consistently increased their profitability over time.

5-Year Historical Operating Cash Flow Growth: Cash flow is a crucial indicator of a company’s financial health. The 5-yr historical growth in operating cash flow helps you identify companies that have been successful in generating cash from their operations.

PE Premium vs. Sector: This filter compares a company’s PE ratio to its sector’s average PE ratio. It enables you to identify companies that are trading at a discount relative to their peers in the same industry, potentially indicating undervaluation.

Now that you have understood the pre-built screen in detail, let’s look at how you can get it within a minute.

Step 1: Go to Tickertape Stock Screener.

Step 2: Click on ‘All Screens’ and then click on ‘See All’ under ‘Premium’.

Step 3: Click on ‘Growth Bargains’ and click on ‘Load’.

That’s it! Your list of high-growth stocks is ready! Try the pre-built screen now!

Features of High Growth Stocks

High growth stocks are characterised by several features that distinguish them from other types of investments. Here are some key characteristics:

1. High Revenue Growth: These companies usually exhibit rapid increases in revenue. You can look at their quarterly and annual revenue reports to gauge this growth.
2. Innovative Business Models: High growth stocks often belong to companies with unique and innovative business models. This innovation can drive significant growth over time.
3. Strong Market Position: Companies that are leaders in their respective sectors are more likely to be high growth stocks. Their strong market position can be a good indicator of sustained growth.
4. High Price-to-Earnings (P/E) Ratio: These stocks often have high P/E ratios compared to the market average, reflecting investors’ expectations of future earnings growth.
5. Reinvestment Strategy: Growth companies typically reinvest a significant portion of their earnings back into the business to fuel further growth. This reinvestment can support long-term expansion.

Factors to Consider When Choosing High Growth Stocks

Selecting the right high growth stocks requires careful consideration of various factors. Here are some points you may want to keep in mind:

1. Industry Trends: You might want to consider the overall trends in the industry. Industries experiencing rapid technological advancements or consumer demand shifts can provide fertile ground for growth stocks.
2. Company Financials: Examining a company’s financial health is crucial. You can assess the company’s revenue, profit margins, and historical performance to get an insight into the company’s financial health.
3. Management Team: The competence and track record of a company’s management team can significantly influence its growth trajectory. Strong leadership often drives successful growth strategies.
4. Market Potential: Evaluating the market potential for a company’s products or services can help you identify the best growth stocks for the next 10 years in India. Large addressable markets can indicate more significant growth opportunities.
5. Risk Factors: It’s essential to consider the risks associated with high growth stocks. These can include market volatility, competitive pressures, and the potential for slower-than-expected growth.
6. Valuation: While high growth stocks typically have higher valuations, you should ensure that the stock’s price aligns with its growth potential. Overvalued stocks may not offer the best returns in the long run.

High Growth Sectors in India

Identifying the right sectors can be crucial when looking to invest in high growth stocks in India. Here are some of the high growth sectors you might want to consider:

1. Technology and IT Services: This sector has been expanding rapidly, driven by advancements in IT services, software development, and digital innovation. Companies in this sector often show strong growth prospects due to high demand for technology solutions.
2. Healthcare and Pharmaceuticals: The healthcare and pharmaceutical sectors have experienced substantial growth, especially due to the COVID-19 pandemic. The increasing focus on healthcare infrastructure, medical research, and pharmaceutical manufacturing makes this sector a promising area for growth.
3. E-commerce and Retail: With the rise of digital literacy and increased internet penetration, the e-commerce sector in India is booming. Companies involved in online retail, logistics, and digital payment solutions are poised for significant growth.
4. Renewable Energy: India’s commitment to renewable energy and sustainability is driving growth in this sector. Companies focusing on solar, wind, and other clean energy sources are expected to benefit from government initiatives and increasing environmental awareness.
5. Financial Services: The financial services sector, including fintech, banking, and insurance, is expanding rapidly. The adoption of digital financial solutions and increased financial inclusion efforts are contributing to this sector’s growth.

How to Invest in the Best Growth Stocks in India?

Investing in the best growth stocks in India involves a strategic approach. Here are some steps you might follow:

1. Research and Analysis: Begin by researching potential growth stocks and analysing their financials, industry trends, and market potential. You can use Tickertape Stock Screener to filter stocks based on growth parameters.
2. Use Pre-built Screens: Tickertape offers pre-built screens such as “Growth Bargains,” which can help you identify undervalued growth stocks with strong potential. These screens use predefined criteria to filter out the best options.
3. Diversify Your Portfolio: Diversification is key to managing risk. You might want to spread your investments across different sectors and companies to mitigate the impact of market volatility.
4. Monitor and Review: Continuously monitoring your investments and reviewing their performance can help you make informed decisions and adjust your portfolio as needed.
5. Invest for the Long Term: Growth stocks typically require a long-term investment horizon. Staying invested for an extended period can allow you to benefit from the compounding effect of growth over time.

Benefits of Investing in the Best Growing Shares

Investing in the best growing shares can offer several benefits, including:

1. Potential for High Returns: High growth stocks can provide substantial returns over the long term. Companies that expand rapidly can see significant increases in their share prices, potentially leading to large profits for investors.
2. Capital Appreciation: Investing in growth stocks can lead to capital appreciation as the company’s market value increases. This can enhance your overall portfolio value, contributing to your long-term wealth accumulation.
3. Innovation and Market Leadership: Growth companies often lead their industries in innovation and market share. Investing in such companies can give you exposure to the latest advancements and trends, positioning your portfolio to benefit from cutting-edge developments.
4. Economic Growth: High growth stocks are typically tied to sectors driving economic growth. By investing in these stocks, you can benefit from the overall economic expansion, as these companies often thrive in growing economies.
5. Diversification: Adding high growth stocks to your investment portfolio can provide diversification. These stocks can balance other types of investments, potentially reducing overall portfolio risk.

Risks Associated with Growth Stocks

While growth stocks can offer attractive returns, they also come with certain risks that you might consider:

1. Market Volatility: Growth stocks can be more volatile than established, blue-chip stocks. Their prices can fluctuate significantly based on market conditions and investor sentiment, leading to potential short-term losses.
2. High Valuations: These stocks often trade at high valuations, which can lead to increased risk if the company does not meet growth expectations. Overvalued stocks may experience sharp declines in price, impacting your investment.
3. Execution Risk: Companies pursuing aggressive growth strategies may face execution risks. Failure to implement their plans effectively can negatively impact their performance, leading to potential losses for investors.
4. Sector-Specific Risks: Growth stocks in specific sectors may be subject to unique risks, such as regulatory changes, technological disruptions, or shifts in consumer preferences. These factors can affect the company’s growth prospects and stock performance.
5. Limited Dividends: Growth companies usually reinvest their earnings into the business rather than paying out dividends. As an investor, you may not receive regular income from these stocks, relying primarily on capital gains for returns.
6. Economic Downturns: During economic downturns, growth stocks may suffer more than other types of stocks. Their high growth rates may be harder to sustain in a slow economy, leading to potential declines in their stock prices.

Who Should Invest in the Fastest Growing Stocks in India?

Investing in the fastest growing stocks in India may suit various types of investors. Here are a few personas who might consider these investments:

1. Young Investors: Young individuals who have a longer investment horizon can benefit from the potential high returns of growth stocks. They can afford to take on more risk and ride out market volatility.
2. Risk-Tolerant Investors: If you are comfortable with taking on more risk for the possibility of higher returns, growth stocks might be suitable for you. These investors are often willing to accept short-term losses for long-term gains.
3. Tech-Savvy Investors: Individuals with a keen interest in technology and innovation might find growth stocks appealing. They can leverage their knowledge to identify promising companies within tech sectors.
4. Long-Term Investors: Investors with a long-term perspective who are willing to hold onto their investments for an extended period might find growth stocks rewarding. The compounding effect of growth over time can lead to substantial returns.
5. Diversified Portfolio Seekers: If you are looking to diversify your investment portfolio, adding growth stocks can balance your holdings. This diversification can help mitigate overall risk.

To Conclude

Investing in growth stocks in India can be a viable strategy for those seeking high returns and capital appreciation over the long term. By understanding the sectors with the most potential, evaluating company financials, and using Tickertape Stock Screener, you can make informed investment decisions. While growth stocks come with certain risks, the benefits of investing in the best growing shares can significantly enhance your portfolio. Remember, it is always worthwhile to consult a financial advisor before investing.

FAQs About Growth Stocks in India

• Author
• Recent Posts

Anjali Chourasiya

I am a finance enthusiast who loves exploring the world of money through my lens. I’ve been dedicated to building systems that work and curating content that helps people learn.

As an insatiable reader and learner, I’ve spent the last two years exploring the world of finance. With my creative mind and curious spirit, I love making complex finance topics easy and fun for everyone to understand. Join me on my journey as we navigate the world of finance together!

Latest posts by Anjali Chourasiya (see all)

• Best Long-Term Stocks to Buy in India for 2024: Features, How to Invest, Who Should Invest! - Jul 19, 2024
• Best FMCG Companies in India: Features, How to Invest, Future of the Industry, and More - Jul 19, 2024
• Top Chemical Companies in India: 10 Best Stocks, How to Identify, And More - Jul 16, 2024