In recent quarters, many companies have struggled to report some good earnings. Covid led lockdown had a big negative impact on them. But there are several companies whose earnings have seen an improvement in covid period too.
In fact, their is an accelerated growth in the businesses of some companies. Growth in financials of these companies has been very good in recent time. Reacting on this accelerated growth, shares of these companies have given multibagger returns since 2020.
If these companies continued to grow at a faster pace for some more time, it might help to lift the share prices of these companies to new heights!
So what are the names of these fastest growing companies??
Before mentioning the names, let me tell you that these stocks have been filtered. Name of only those stocks have been added here where growth in financials has been from Top to Bottom! Means, growth has come in both Revenue and Profit. Additionally, only those names have been added whose Market Capital is atleast Rs 10,000 crore.
For a Low Market Cap company, it can be little easy to rise multifold. But for a Mid Size company, rising multifold times is not always easy unless company has achieved some great growth.
Here is the list of companies or Stocks that have grown at a faster pace in terms of business financials and share price both in last one year.
List of Fast Growing Companies/Stocks in India
Note: In Financials column, REV means Revenue and PAT means Profit.
|Company Name||Past 1 Year Returns||FY2021|
|Apl Apollo Tubes||374%||REV—8,500|
So, these were the stocks where Great growth in financials in covid period too has helped their prices to reach a new height.
There are some stocks where even after achieving great growth, share prices are not able to move much. But investors in these stocks have positively reacted on the growth. Better growth has caused increased demand of these stocks among investors, due to which stocks have been able to see a great rise.
What are the chances of these Fast Growing Stocks to perform in Future?
If mentioned companies continued to show encouraging growth in financial numbers in future too, then prices of these stocks are also expected to see a good rise in future. Growth Potential in these stocks has still not peaked yet. That means, efforts of management can still push the Financial numbers or Business of these Growth companies to new heights.
Is there any High Risk in these Fast Growing Companies?
Generally, when a stock is in a phase of High Growth, their PE or Price to Earning Ratio might see some kind of re-rating. In other words, it might see some expansion in figure. Say ABC stock trade around 20 PE during its slow growth phase. Then, it doesn’t necessary that stock will still be trading with 20 PE when the phase will be of High Growth. PE could reach to 30, 40 or more higher figure on the back of high demand of stock of among investors.
When the ABC company will again move to slow growth phase, the PE (Valuations) might also see some decline and move to 20 levels again. When this thing happens, share price might see some extra decline or correction in price compared to what is happening in the financials.
That is the end of this post.
Good Luck : )
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