Growth stocks refer to companies that experience higher growth rates than the average growth rates in their share prices, revenue, profits, or cash flow compared to the broader market. Investors are attracted to growth stocks because they offer the potential for substantial price appreciation rather than relying on dividend income.
It includes both smaller, emerging companies, as well as industry disruptors, and they can also include established companies. Regardless of size or age, growth companies typically differentiate themselves by offering distinctive services and products.
They often possess modern technologies or intellectual property that place them ahead of their industry peers. These factors contribute to their potential for rapid expansion and increased market share.
Indeed, growth companies tend to reinvest their earnings and may leverage debt to fuel their rapid expansion. This proactive approach often involves increasing production capacity, acquiring other businesses, and expanding their workforce. As a result, growth stocks are often characterized by their focus on reinvestment rather than distributing dividends to shareholders.
They are comparatively riskier and more volatile than the value stocks. Furthermore, it may have low or even negative earnings, often making the high PE stocks. They often trade at high price-to-book value ratios in the market. This means that the market values the company’s stock at a premium compared to its book value, which is the value of its assets minus liabilities. It also reflects the market confidence in the company’s growth. Let’s explore some of the growth stocks in India.
Top 5 Stocks Having High Sales Growth:
| Company Name | CMP Rs | PE (x) | Sales Growth 3Yrs % | 1Yr return % |
| Max Healthcare | 620.8 | 54.6 | 62.7 | 67.06 |
| Adani Enterprises | 2,384.00 | 102 | 46.7 | 1.46 |
| Tube Investments | 3,321.50 | 67.8 | 46.6 | 64.84 |
| Solar Industries | 3,681.80 | 44.1 | 45.7 | 33.59 |
| Adani Green | 956.8 | 133.8 | 45.1 | -54.65 |
Top 5 Stocks Having high-Profit Growth:
| Company Name | CMP Rs | PE (x) | Profit Growth 3Yrs % | 1Yr return % |
| FACT | 492.85 | 52 | 461.64 | 372.38 |
| Adani Green | 956.75 | 133.8 | 192.32 | -54.65 |
| Max Healthcare | 620.75 | 54.64 | 165.36 | 67.06 |
| DLF | 496.55 | 60.45 | 122.98 | 41.72 |
| Dalmia Bharat | 2064.55 | 35.09 | 80.77 | 39.74 |
Top 5 Stocks Trading at High PE:
| Company Name | CMP Rs | PE (x) | Sales Growth 3Yrs % | Profit Growth 3Yrs % | 1Yr return % |
| FSN E-Commerce | 145.95 | 2161.7 | 42.77 | 47.03 | -39.8 |
| Trent | 1677 | 201.37 | 33.22 | 46.52 | 40.01 |
| Adani Green | 956.75 | 133.81 | 45.13 | 192.32 | -54.65 |
| Adani Enterprises | 2384 | 102.03 | 46.68 | 45.78 | 1.46 |
| Sona BLW Precision | 548.05 | 81.72 | 37.11 | 38.09 | -6.52 |
Top 5 Stocks based on market capitalisation:
| Company Name | CMP Rs | M Cap Rs Cr | PE (x) | Sales Growth 3Yrs % | Profit Growth 3Yrs % | 1Yr return % |
| Adani Enterprises | 2384 | 271776.27 | 102 | 46.68 | 45.78 | 1.46 |
| Adani Green | 956.75 | 151552.34 | 133.8 | 45.13 | 192.32 | -54.65 |
| LTIMindtree | 4915.5 | 145443.68 | 32.96 | 45.03 | 42.6 | 19.94 |
| Tube Investments | 3321.45 | 64190.63 | 67.8 | 46.59 | 43.89 | 64.84 |
| Max Healthcare | 620.75 | 60300.78 | 54.64 | 62.72 | 165.36 | 67.06 |
To compile a list of growth stocks, we have established specific criteria for filtering stocks. These criteria include a market capitalization of over Rs 30,000 Crore, a profit growth (CAGR) exceeding 30% over the last three years, a sales growth (CAGR) surpassing 30% over the same period, and a current price-to-earnings (PE) ratio of more than 30 times.
When determining what is most suitable for any investor, it is crucial to consider the comfort level with the initial investment (if any), the level of risk associated with the investment, and how it aligns with the investor’s financial objectives.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet, and is subject to changes. Please consult an expert before making related decisions.
We're Live on WhatsApp! Join our channel for market insights & updates
Enjoy ₹0 Account Opening Charges
Join our 2 Cr+ happy customers
Get the link to download the App
