Small-cap companies where promoter holding has increased; do you own any?

Promoters have a significant impact on a company’s success and growth as they not only invest in the company but also hold executive positions. Hence, it is important for retail investors to consider the stakes held by promoters.

Generally, companies with higher promoter holdings are considered safer investments compared to those with lower promoter stakes. This is because if promoters themselves believe that the company’s stocks are worth purchasing, it indicates a higher likelihood of the company performing well in the future.

If the promoter’s stake is increasing quarter on quarter, indicates the promoter’s interest and confidence in the company, even if the promoter’s holding is less the increasing trend can be considered a healthy sign.

EPS stands for Earning per share, which indicates the company’s profitability on a per-share basis. It is widely used by investors, analysts, and financial institutions to evaluate the financial performance of a company and compare it to other companies in the same industry. Higher / growing EPS generally indicates better profitability.

The Price-to-Earnings (P/E) ratio is a financial metric used to assess the relative value of a company’s stock by comparing its market price per share to its earnings per share. While operating margin provides insight into how efficiently a company generates profit from its core operations before considering other non-operational factors such as interest expenses or taxes. It measures the company’s ability to control costs and generate profits solely from its business activities. Always higher the better.

In order to compile a list, we have chosen companies that meet the following criteria: the promoter holding exceeds 50% and has shown an increase in the latest quarter. Additionally, these companies exhibit a growing EPS, and PE ratio below 20 times. Furthermore, these selected companies have a market capitalization ranging from Rs 1000 Crore to Rs 5000 Crore. The list is arranged based on the percentage change in promoter holding during the recent quarter.

While preparing an investment list, an increase in promoter holding can give confidence; however, it is crucial to consider other parameters before making any investment decisions. Retail investors often seek out companies where the promoter’s stake is rising, as it is seen as a positive sign. Nevertheless, investors should examine additional factors as well. These companies should be monitored closely by investors and must keep these on their radar.