Introduction
Every ace Indian investor become rich through their multibagger investments. In a recent interview, Shankar Sharma quoted, “You are not going from a penthouse to a slum if one buys HDFC Bank, but you are not going to go from a slum to a penthouse either if you buy HDFC Bank. Most people live in one- or two-bedroom places. If they want to go to the penthouse, they will need to go to the small cap end of the market where many Small Cap Stocks are making highs”.
Therefore, to find multibagger one must look for small cap companies. Small cap companies with steady and high growth in profitability and good prospects of business with negligible debt will be a safe bet as per big investors and several stock market courses. In this list we have considered only those stock which fulfil the following criteria:
- Market Capitalization of more than 100 crores but less than 5000 crores
- Sales growth for 5 years (CAGR basis) >20%
- Profit growth for 5 years (CAGR basis) >20%
- Return On equity >20%
- Return On Capital Employed >20%
- Debt to equity < 0.05
This is a filter taught in stock market courses online with certificate and acts as the base of fundamental analysis of stocks in several stock market courses of institutes. Let us cover some Small Cap Stocks of Indian markets which pass this filter.
The Tinplate Company of India Ltd (TCIL)
The Tinplate Company of India Limited is India’s leading tinplate producer. The company has more than 40% of total domestic share in tinplate production. Tinplate Company of India Ltd is a subsidiary of Tata Steel which has close to 75% stake in it.
Tinplate Company of India Limited has the two key product offerings of Tinplate and Tin Free Steel which is used in for packaging processed foods. The Company caters to the needs of extremely diverse segments, including Edible Oils, Paints & Pesticides, Processed Foods, Battery & Aerosols.
The company is also working with regulatory bodies to develop packaging standards which will significantly reduce imports of cheaper quality tinplate and increase demand of prime tinplate in the country.
Financials
The market cap of this company is close to 4500 Cr. The company has posted magnificent financials and is net debt free.
| Company | Sales Growth 5 Years (%) | Profit Growth 5 Years (%) | ROE (%) | ROCE (%) | Debt / Equity |
| Tinplate Company Of India | 38.63 | 66.04 | 34.99 | 46.95 | 0.01 |
Share price
The company’s share price has rose 150% in the last one year.
Ksolves India
Ksolves India is in the space of Information Technology and is primarily engaged into software development, enterprise solutions, consulting and providing IT solutions to companies across sectors such as Real Estate, E-commerce, Finance, Telecom and Healthcare. The company has won multiple projects in Q3FY22. They are
- Front end technology project for Europe’s leading Energy player.
- Big data analytic project for a fast-growing Fintech based out of Singapore.
- New York based Salesforce Service provider part of a 20bn Market capital group.
Financials
The market cap of this company is close to 430 Cr.
The company has posted stellar results and tremendous growth and is debt free.
| Company | Sales Growth 5 Years (%) | Profit Growth 5 Years (%) | ROE (%) | ROCE (%) | Debt / Equity |
| Ksolves India | 69.45 | 127.77 | 120.3 | 161.06 | 0 |
Share price
The company’s share price has risen by 470% in the past year.
Before we move ahead, it is important to note that the aim of this blog is to teach how to do fundamental analysis through stock market courses for the beginners free. It should not be viewed from the perspective of tips. Let us move ahead now with Small Cap Stocks.
Consolidated Finvest and Holdings Ltd.
Consolidated Finvest & Holdings Limited is a Non-Banking Finance Company. The core business of the company is Investments in shares, stocks, bonds, debentures, mutual funds, inter corporate deposits and loans.
Financials
The market cap of this company is close to 500 Cr. The company has posted good financials. The company has no debt in its books.
| Company | Sales Growth 5 Years (%) | Profit Growth 5 Years (%) | ROE (%) | ROCE (%) | Debt / Equity |
| Consolidated Finvest and Holdings Ltd | 31.55 | 29.67 | 33.64 | 35.64 | 0 |
Share Price
The company’s share price has risen by 190% in the last one year.
Kanchi Karpooram
Kanchi Karpooram Ltd is a Public Limited Company, manufactures camphor and its derivatives – gum resin, value added resins and fortified resin. It is the largest producer of a variety of terpene & paper chemicals in India. The company serves to variety of industries – tyres, paint, paper, food, pharma, and rubber. Some of our esteemed customers are:
- Largest paint manufacturers in India
- Leading tyre manufacturers in India
- Global flavours & fragrance manufacturer
Financials
The market cap of this company is close to 330 Cr. The company has posted good financials and is debt free.
| Company | Sales Growth 5 Years (%) | Profit Growth 5 Years (%) | ROE (%) | ROCE (%) | Debt / Equity |
| Kanchi Karpooram | 26.65 | 138.63 | 50.4 | 66.26 | 0 |
Share Price
The company’s share price has fallen nearly 3% in the last one year.
Kilpest India
Kilpest is into crop protection, public health products and bio-products. It is also a supplier to various govt. organizations, such as FCI (Food Corporation of India), NTPC (National Thermal Power Corporation Limited) and Railway.
3B BlackBio Biotech India Limited, a subsidiary of Kilpest India is engaged in design, development, manufacturing of molecular diagnostic kits. These kits are for testing of patient samples for infectious disease to various terminal diseases like cancer. It is also the first company in India to get the USFDA approval for RT-PCR kit.
Financials
The market cap of this company is close to 280 Cr. The company has posted stellar financials and is net debt free.
| Company | Sales Growth 5 Years (%) | Profit Growth 5 Years (%) | ROE (%) | ROCE (%) | Debt / Equity |
| Kilpest India | 67.24 | 221.79 | 138.7 | 179.46 | 0.01 |
Share Price
The company’s share price has rose 15% in the last one year.
One should keep it in their minds that investment in Small Cap Stocks companies comes at a risk. Only an aggressive investor, who is willing to take risk, should invest in small cap stocks. Personally, our favourite stock in this list is Tinplate Company of India Ltd because of its excellent business, financials and it is a subsidiary of well managed promoter group The Tatas. However, this information is just for educational purpose, and one should not consider it as a buy or sell recommendation.
Investing is a science, where you not only invest in a good company but also buy it at the right price, so it rewards you in the future, taught in the stock market courses for the beginners free. On the other hand, trading is a tool which helps in generating consistent income. The right mindset and analysis techniques of trading are covered in deeply in stock trading certification course.
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2 thoughts on “Top 5 high growth small cap stocks in India”
Sir,
Hindi..men tips provide karen
Check this post https://goelasf.in/10-investing-tips-to-become-a-successful-investor/