Indian markets have touched their all-time highs, and people’s confidence in investing is back. People are looking to invest wisely and are looking for best online stock trading courses in India. While investing in Index is a cushion in your portfolio, stocks are medium to achieve multi-bagger growth. So today, we will talk about some high-growth stocks that have been showing excellent performance in the past and expect to show similar performance in the future. The stocks that the best stock market courses in NCR have chosen, fulfils these two criteria:
- The average return on equity for ten years is greater than 15%
- Profit growth for ten years is greater than 15%
So, let’s start with these stocks as per best stock market course in India!
Honeywell Automation India Ltd
Started in 1987 as a joint venture between Tata and Honeywell, Honeywell Automation India Limited was known as Tata Honeywell Limited. Both companies had a 39.54% stake each. When Honeywell Asia Pacific bought Tata’s stake in 2004, the name was changed to Honeywell Automation India Limited. Honeywell is a leader in providing integrated automation and software solutions, including building and process solutions. It has a wide product portfolio in combustion and environmental controls. It also covers sensing and control, providing global engineering services in automation and control.
1. Honeywell Process Solutions: It provides the required Digitization offerings as requested by customers and establish Honeywell as their preferred automation vendor.
2. Honeywell Building Solutions: The Building Solutions segment provides control and automation technologies that help make buildings green, safe, productive, and smart in verticals like industrials, data centers, pharma and healthcare, energy, premium commercial, transport, infrastructure, etc. For these segments, the business provides state-of-the-art solutions like intelligent buildings comprising building fire detection and alarm systems, management systems, access control systems, video surveillance systems, integrated security systems, and integrated building management systems based on Honeywell’s Enterprise Buildings Integrator.
HAIL caters to its esteemed clientele in domestic markets through various segments: Process solutions, Building solutions, Management Systems, and Advanced Sensing Technologies. It caters to its customers in export markets through the Global Engineering Services Segment and the Global Manufacturing Segment.
3. Advanced Sensing Technologies: The Advanced Sensing Technologies (AST) business has diversified customer accounts from transportation, aerospace, healthcare, and industrial verticals. This business was focused on key account management, demand generation, and localization during FY2021-22. Thus, as per stock market course in India HAIL has economic moat of webbing advantage too!
The company’s product portfolio, which includes pressure switches, humidity and temperature sensors, airflow sensors, and oxygen and breath sensors, helped the business win in healthcare and other industrial verticals. This business also leveraged its defense and military product portfolio to get into new military programs of government customers.
Margins on an uptrend: You can see that the margins have gone up from 9% on Dec 11 to 15% in March 2023. This increase in margins, along with the increase in sales, has resulted in the company’s rise in profits.
As per the data, you can see that the business has been concentrating more on export sales, which has resulted in a rise in the company’s margins. Thus, as per stock market paid course online things are very good!
Going for mid-segment: The company plans to focus on the mass segment, specifically targeting MSMEs through its dedicated ‘Impact Honeywell’ program. Since the focus on productivity, cost control, and quality has become imperative for MSMEs to survive and grow, the company has also decided to focus on this segment.
If you wonder if smaller companies can afford such technologies or if HAIL will have to cut its margins significantly, it need not be the case. According to reports, the products offered to this segment are broken-down versions of its larger building technologies offerings.
According to him, Honeywell sees tremendous potential for adopting automation, digitalization, and smart products and solutions by SME or mid-segment customers. Impact by Honeywell’s portfolio comprises a range of affordable, simple, and connected solutions that go into buildings and focus on security and surveillance, energy management, fire safety, and workforce management.
Strong Strategy: The parent has a clear-stated strategy for HAIL through its East for East (E4E) and East for Rest (E4R) policy. Under this policy, HAIL will manufacture everything required by the Indian market locally and supply/provide service to other markets, such as Latin America, the Middle East, and Africa, apart from being an outsourcing hub for the parent.
This strategy provides some positive outcomes. While HAIL can tap into the high-quality research of the parent; it can make customized products locally and keep costs down rather than fully import or depend on R&D locally. This strategy helps keep margins attractive locally.
As per best online stock trading courses in India, HAIL is forming an ascending triangle, and if it gives a breakout, one can expect bullish momentum.
Persistent Systems Ltd. engages in the business of software and technology services industries. It offers various services, including data and analytics, intelligent automation, cloud & infrastructure, client experiences (CX) transformation, and data and product engineering. The company has invested heavily in AI research and development and has developed several AI-based solutions for its clients.
It provides its services to numerous sectors, which include banking, financial services, insurance, healthcare, life sciences, industrial, software, high-tech, telecom, and media.
Improved efficiency of the client
- The company was able to reduce 85% time in decision-making for a client by automating the loan process.
- The company was able to reduce 80% of manual effort for a client by setting up software for clinical data review.
- The company was able to reduce 45% cost for a client by transitioning to SAAS.
Industry-leading Revenue Growth: Persistent systems witnessed strong revenue growth of 37.7% YoY, with industry-leading consistent growth for twelve consecutive quarters. On the back of strong deal wins and core strength in digital engineering, the management believes the business will grow similarly. The company achieved US$1 bn in revenue in FY23 for the first time. It also aims at US$2 bn annual revenue in the medium term.
Marquee Clients: The company has marquee clients, as you can see in image 60 of the global fortune 500 companies are clients of the persistent system,8 of the ten largest Banks in both the US & India are company’s clients,4 of 10 Top US Health Systems & Payors, 5 of the 10 Top Pharmaceutical Companies, and 6 of 10 Top Medical Device Companies. This implies, Persistent Systems has very good brand loyalty moat as per stock market courses in NCR.
Client concentration lowers, and client count increases: The client concentration is reduced from 46.7% to 34.7%, and the client count for more than $5M annual revenue has increased from 21 to 34.
Attrition is coming down: Attrition continued to trend lower from 26.6% to 19.8%, and it added 291 headcounts in Q4 with plans for 850-1000 fresher adds in FY24 and wage hike plans in Q2FY24. This decrease in attrition rate has improved the operating profit margin from 17% in FY22 to 18% in FY23. Whereas if you look at the giants like Infosys and TCS, the OPM of these companies has come down in comparison to FY22.
Company’s guidance for FY24
The company said in its con call: We don’t give forward-looking guidance but let me give you a color on the thing. If you look at the trailing 12 months ACV booking, if you look at the quarterly bookings, all of that has shown a healthy trend. So, from that perspective, the booking should translate into growing revenues over the quarters.
Regarding the range, look, we have said that we have also delivered up to 9% quarter-on-quarter. Here, we are looking at, in the subsequent quarters, anywhere between 3%-5% and 4%-6%. That is the range, and we’ll try and stick to that. On the margin front, the company said, “The company has multiple levers to improve margins, including scaling existing accounts, expertise in Generative AI and Cloud, and freshers’ deployment.”
This vision is good guidance compared to a top IT company’s guidance as per stock market paid course online.
As per best online stock trading courses in India, it is currently in a consolidation zone.
Timken India Ltd is into the manufacturing, distribution, and sale of anti-friction bearings, accessories, components, and mechanical power transmission products across different sectors. It also provided maintenance contracts and refurbishment services, and industrial services. It also provides friction management solutions for various global industry applications.
If you look at the revenue distribution, the company receives a maximum of its business in North America, which comprises 48%, then 22% in Europe, the Middle East, and Africa,23% -in Asia Pacific, and the remaining 7% from Latin America. As per top 5 online stock market courses in India, it has wide global presence.
The company has two segments: the bearings, where the company gets 69% of its total sales, and the second is industrial motion, from which it gets 31% of its total sales. The industrial motion segment comprises – Belts, Brakes & and clutches, Gear drives, and many more.
Change in product mix: The company has tripled annual revenue to over $1.2B in “newer” markets. These are attractive sectors with strong margins and offer secular growth. Moreover, these industries had different cyclicality profiles. This ensures the company from cyclicity in profits.
The following are the newer sectors-Renewable Energy, Automation, Industrial Services, Marine, Food & Beverage and Passenger Rail. The company further aims to capitalize on emerging trends and technologies. As per stock market course in India, implying, the company is willing to take risks and profit from opportunities.
Fully Serving Customers’ Needs: Industrial motion and engineered bearings are closely adjacent products across the industrial powertrain. As the company has started providing products from both segments, it can increase its wallet share as the client purchases more products or services from that company rather than competitors. This resulted in understanding and addressing customer needs more effectively.
Faster than industry growth: If you look at the company’s revenue growth, EPS growth, or EBITDA growth, the company is nearly two times ahead of its industry.
If you look at the revenue growth CAGR, it shows the company’s growth to be 9.1%, whereas the peer median is still at 4.1%. The same goes for the other two metrics, also.
Employing earnings back to business: The company has set a 3.5-4.0% CapEx Target for Sales. This capex will be used by the company for maintenance of existing machines which will be approx. 1% of the sales.
The remaining spend is generally allocated to organic growth and/or productivity improvement initiatives.
- New capacity/capabilities to drive growth,
- Investments in productivity/automation to maintain cost competitiveness,
- Operational Excellence – Improve productivity and margins.
This company strongly believes in acquisition to give a boost to its growth. Since 2010 Timken has completed at least one acquisition every year.
- Allocated over $2 billion of capital to acquire more than 20 businesses that have added over $1 billion to sales in the aggregate,
- Significantly expanded industrial motion portfolio- added new products,
- Added scale in new, faster growing markets,
- Expanded global customer base.
As per best online stock trading courses in India, the company is currently in a consolidation zone.
Started in 1958 in India, APAR Industries has grown into a diversified billion-dollar company and expanded to over 140 countries in 60+ years. It contributed to India’s electrification process, from manufacturing power transmission cables to having three broad business segments: Conductors, transformers and specialty oils, and Power/telecom Cables. Majority of the business comes from Conductors which is 46.6% followed by Speciality Oils (25%) and Cables (21.7%).
The company’s sales for the first time crossed Rs 10,000 crore and reported a sales growth of 54%, and the profit growth has nearly doubled. This is mainly due to the high-volume growth that the company reported:
- On a Y-0-Y basis, conductors reported volume growth of 49%
- On a Y-0-Y basis, Speciality Oils reported volume growth of 5%
- On a Y-0-Y basis, Lubricants reported volume growth of 7%
Reputed clientele: The company has established relations with large EPC players like Kalpataru Power Transmission Limited, L&T, and KEC International Limited, among others, along with the supply of conductors and cables to all the transmission companies and major utilities like railways, defense, and marine. As per stock market courses in NCR, it implies that the company has very good brand loyalty.
The company is the largest supplier of copper conductors for the railway electrification program. The company is one of the largest transformer oil manufacturers in specialty oil. It benefits from the strong demand for power transformers while catering to other products like white oil for food and pharma grade, industrial oil, and lubricants.
APAR is amongst the world’s top three producers of conductors and specialty oils. In the transformer oil segment, it offers over 400 products with varied applications in the industrial oil sub-segment. To cater to the need of growing demand in the Middle East and African markets, APAR commissioned its port-based plant at Hamriyah, Sharjah, in FY18.
Catering to high-demand industry: The company has favorable demand prospects, mainly driven by the sizeable investments in the power industry through increased budgetary allocation under the reform-linked distribution scheme and strengthening of power systems with growing renewable capacity. The Government’s increased capital expenditure allocation will likely fuel electricity demand growth, supporting companies like AIL.
The company caters to the demand of end-user industries such as power, infrastructure, railways, defense, and marine. With the Government’s rising budgetary allocations towards these sectors, the demand prospects for the company’s products are expected to increase.
Focus on product premiumization: Over some time company has undertaken a premiumization exercise to reinvent its business segment from being low margin aluminum conductor company (~94% of segment revenue as of FY16) to product premiumization with the addition of copper conductors and a range of aluminum alloy rods. Subsequently, premium product contributions increased from 6% in FY16 to 44% in FY23.
The company incurred a capex of Rs 4.3bn over FY16-23, mainly towards new product launches in premium products. Additional Rs1bn capex has been planned over the next 18-24 months towards capacity expansion to meet increasing demand.
World’s leading player in specialty cables: APAR is the world’s largest manufacturer of Speciality cables and has pioneered in elastomeric and E-beam (only Indian player with 4 E-beam facilities) cables in India and now caters to various industries such as railways, shipbuilding, steel, defense, mining, and housing wires.
The Elastomeric cables reported strong revenue growth of 41% YoY in FY23, driven by increasing traction from renewable energy, defense, and railways. Elastomeric is the largest revenue contributor for cables.
Using E-beam technology, the company also enjoys a first-mover advantage for manufacturing cables such as house wires, railway cables, and solar cables. It is the only company using this technology, giving the product a 50-year life, melt resistance, and flame retardant to 105 degrees for house wiring. As per stock market paid course online, it implies that APAR is invested heavily into RnD.
As per technical analysis taught in top 5 online stock market courses in India, one can see that company has rallied straight upwards in last one year and has delivered 421%.
Britannia Industries is amongst India’s leading food companies with a 100-year legacy and annual revenues of over Rs. 9000 Cr. Tiger, NutriChoice, Good Day, Milk Bikis, and Marie Gold are household names in India. The largest brand in the organized Indian bread market, Britannia Bread, clocks an annual turnover of over 1 lac tons in volume, equivalent to Rs. 450 crores in value.
As you can see from this image, Britannia has been gaining market share and is the market leader, and the gap in the market share has also been widening. Britannia has been winning the biscuit game in India.
The company has been widening the distribution and has added 2 Lakh stores this year. This expansion in the market helps to increase sales.
The company also keeps bringing in new products, assisting it in staying ahead of its competitors. The company recently got Croissant in chocolate and another orange variant.
The company has also launched coconut water in Q4 and has been bringing a new range of drinks, such as milkshakes. These new values add products that help the company to drive sales.
This company has become multi-bagger stock for one big reason: a margin expansion from 6% in FY12 to 17% in FY23.
This expansion of margins has mainly happened due to a reduction in wastage in production and bringing in more value and products that led to expansion in margins.
You can see how in FY22-23, the operating profits have risen steadily despite the rising inflation. This is mainly because of the cost-efficiency program taken by the company.
As per best online stock trading courses in India, Britannia broke its consolidation phase, rallied upwards, and is currently at an all-time high price.
All these companies are fundamentally zone and have delivered exceptional profit and sales growth in the past and are expected to do the same in the future.
If you want to know the other stock, then check out this link https://www.screener.in/screens/991438/high-roe-and-high-growth/ or enrol for top 5 online stock market courses in India to learn investing from scratch.