Saturday, October 24, 2009

100 fastest growing small companies in India

Looking for the next Infosys? Well, you might be in luck. This list of fastest growing small companies might just give you the next Infosys. It is hard to pick on a single stock and hand it to the investor. But the due diligence is already done by ET and narrowed it down to 100. It’s your turn to pick your horse.

Comparing any of these companies with Infosys might not be apt because there are only 5 Infotech companies. And the comparison is merely for the potential growth of the stock.

From a possible 5000 companies listed on BSE, ET narrowed it to an exciting 100.

Here is how :

  1. Of the 5000 stocks listed on BSE, only 2/3rds are actively traded stocks.
  2. Of the 3300 companies above only 2300 companies are very actively traded and have historical data.
  3. 2 lists were generated. One based on revenues and one based on market cap.
  4. All the companies which figured in the top 10% in both the lists (too big) and the bottom 50% in the both the lists (too small and better for VC’s) are knocked off.
  5. That left 1000 companies. Which filtered in the following manner :

While filtering the companies based on growth parameters, we considered only those companies, which beat the average growth rates of all the 1,000 companies. Also, we eliminated those companies that have a debt-equity ratio of more than 2.0 in their latest financial year and relatively lower interest coverage ratio. After this process, we were left with almost 300 companies. At this stage, we decided to rank the companies based on the their 3-year growth rates, the ratio of operating cash flows (actual) to cash profit (reported) and 3-year average return on capital employed (RoCE). First we arrived at rankings based on individual parameters and then came out with a composite ranking (to be read as final ranking). While arriving at the composite ranking, we assigned 50% weightage to the quality parameter ?cash flow ratio and RoCE? and rest to the revenue and earnings growth. Finally, we weeded out companies, which reported losses in recent quarters or whose growth was too dramatic (source)

Quite an intriguing way to filter out companies and arrive at a dynamic list.

These are the 100 companies which came through ETIG’s filters :

Rank

Company Name Industry Total Income Op. Profit Net Profit Market
cap
CMP(Rs)
1 Sulzer India Capital Goods 196.3 55.77 34.12 300 895
2 Oil Country Tubular Steel 432.71 101.05 67.7 384 83
3 Tata Sponge Iron Steel 635.91 172.42 107.59 361 250
4 Zydus Wellness FMCG 245.25 41.32 27.02 98 174
5 Liberty Phosphate Fertilisers 336.95 33.34 18.16 35 24
6 Rain Commodities Cement & Cement Products 1152.83 224.25 104.61 1276 172
7 Engineers India Capital Goods 1903.17 367.74 388.13 6034 1157
8 India Infoline Finance 590.61 173.28 109.14 4036 141
9 CRISIL Miscellaneous 442.22 176.6 148.75 2795 4063
10 Praj Industries Capital Goods 777.3 140.08 130.34 1876 97
11 Tide Water Oil Oil & Gas 572.59 55.61 35.48 434 4840
12 KS Oils Solvent Extraction 3396.8 374.44 182.68 2162 68
13 Relaxo Footwears Leather & Leather Products 441.11 52.3 20.36 114 154
14 Vinati Organics Pharmaceuticals 207.16 38.88 29.54 197 197
15 Bajaj Electricals Consumer Durables 1823.71 189.81 95.47 1089 714
16 Nava Bharat Ventures Diversified 1361.37 525.43 464.57 2879 367
17 Orient Paper & Industries Diversified 1520.35 340.76 184.38 1047 52
18 IL&FS Investment Managers Finance 99.17 54.93 36.39 950 49
19 Hawkins Cooker Consumer Durables 253.69 35.03 22 233 458
20 Nagarjuna Agrichem Pesticides & Agrochemicals 609.39 112.92 51.96 238 161
21 Diamond Power Infrastructure Ltd Cables 695.45 99.56 62.49 461 200
22 TRF Capital Goods 590.43 74.47 48.2 535 496
23 Fem Care Pharma FMCG 118.47 10.92 9.46 253 701
24 National Peroxide Chemicals 126.85 37.16 17.33 117 210
25 Sagar Cements Cement & Cement Products 380.45 82.94 23.52 318 188
26 Divi’s Laboratories Pharmaceuticals 1157.35 405.25 332.89 6866 574
27 VST Tillers Tractors Automobiles 299.22 51.8 34.78 225 406
28 Jindal Drilling & Industries Oil & Gas 1002.85 85.94 49.07 1396 585
29 Texmaco Capital Goods 799.7 126.33 73.86 1577 133
30 Supreme Industries Plastic Products 1667.19 237.94 97.38 799 324
31 Dhanuka Agritech Pesticides & Agrochemicals 334.07 54.37 23.53 161 197
32 Bharati Shipyard Shipping 1126.92 281.13 137.6 562 194
33 WPIL Capital Goods 165.81 17.43 8.69 67 93
34 HeidelbergCement India Cement & Cement Products 1003.78 163.12 157.89 1003 43
35 Havells India Capital Goods 2238.08 218.45 153.75 1846 322
36 ICSA India Infotech 1176.83 266.85 161.33 955 203
37 Tilaknagar Industries Breweries & Distilleries 248.74 45.98 21.11 131 66
38 Ratnamani Metals & Tubes Steel 896.57 142.96 63.97 467 102
39 Gujarat Fluorochemicals Chemicals 1101.03 541.16 347.09 1762 154
40 Nitta Gelatin India Chemicals 189.92 33.82 18.27 110 147
41 Shilpa Medicare Pharmaceuticals 156.43 38.97 16.43 350 141
42 TTK Prestige Consumer Durables 414.17 42.18 24.67 246 265
43 Amara Raja Batteries Dry Cells 1331.03 200.26 108.13 1156 139
44 Confidence Petroleum India LPG Bottling 245.31 27.54 17.98 214 8
45 Hindustan Dorr-Oliver Capital Goods 616.66 66.33 36.88 504 133
46 Mcnally Bharat Engineering Co. Capital Goods 1235.96 104.82 35.86 549 175
47 Best & Crompton Engg.Ltd. Capital Goods 48.64 -39.26 -43.97 217 17
48 KPIT Cummins Infosystems Infotech 560.02 124.62 66.46 592 78
49 Anjani Portland Cements Cement & Cement Products 132.62 36.59 16.95 69 35
50 Gujarat Gas Company Oil & Gas 1327.75 235.05 154.28 2584 201
51 Bayer Cropscience Pesticides & Agrochemicals 1592.32 190.82 115.72 1464 393
52 KCP Cement & Cement Products 361.66 100.27 66.34 354 250
53 J K Lakshmi Cement Cement & Cement Products 1315.35 365.66 265.49 838 134
54 JK Cements Cement & Cement Products 1591.22 380.83 176.43 899 134
55 Opto Circuits (India) Consumer Durables 444.81 165.31 138.49 3156 204
56 Micro Technologies (India) Infotech 232.37 100.15 58.89 159 147
57 Gujarat Reclaim & Rubber Prod Rubber & Rubber Products 132.26 20.86 12.86 70 560
58 Geodesic Infotech 571.66 251.67 197.34 1274 126
59 Honeywell Automation India Consumer Durables 1075.74 175.33 114.84 1501 1699
60 Kesoram Industries Diversified 4236.93 662.77 358.4 1643 373
61 JMC Projects (India) Construction 1296.45 102.37 35.34 385 175
62 Orient Abrasives Abrasives 302.3 66.39 33.28 243 21
63 TIL Capital Goods 828.44 78.14 32.36 281 283
64 OCL India Cement & Cement Products 1272.9 314.67 134.97 721 126
65 Gujarat Mineral Development Corpn. Mining & Minerals 1031.75 442.89 244.1 3547 109
66 Ushdev International Trading 1394.2 61.79 21.84 156 149
67 Sterlite Technologies Cables 2326.23 253.16 126.83 1754 280
68 PSL Steel 3524.37 237.42 82.44 808 163
69 UB Engineering Capital Goods 457.03 35.68 21.9 141 79
70 Temptation Foods FMCG 978.66 80.35 54.78 104 38
71 Panama Petrochem Chemicals 320.06 33.95 10.21 61 119
72 Techno Electric & Engineering Company Construction 534.76 58.27 73.6 885 143
73 Deccan Cements Cement & Cement Products 231.51 74.69 33.86 172 238
74 Core Projects And Technologies Infotech 378.11 106.78 84.66 1690 189
75 Aegis Logistics Transport & Logistics 328.14 45.29 31.8 287 139
76 GEE Electrodes 126.14 12.54 6.4 124 60
77 Nilkamal Plastic Products 878.33 87.97 11.66 179 141
78 Torrent Cables Pharmaceuticals 177.95 16.17 14.21 112 160
79 Maharashtra Elecktrosmelt Ferro Alloys 343.86 43.68 40.44 1136 423
80 Jyoti Capital Goods 257.74 22.59 4.66 56 47
81 Hitachi Home & Life Solutions Consumer Durables 498.87 31.78 23.89 218 97
82 Glaxosmithkline Consumers Healthcare FMCG 1863.15 313.33 224.69 4734 1182
83 Deccan Chronicle Holdings Entertainment & Media 881.84 279.89 156.11 2873 143
84 Flawless Diamonds (I) Diamonds & Jewellery 566.34 23.37 12.91 57 35
85 HBL Power Systems Dry Cells 1193.11 180.97 82.84 795 312
86 Aditya Birla Chemicals (India) Chemicals 218.54 73.95 48.61 176 73
87 Tinplate Company of India Metals 754.25 139.77 53.27 336 54
88 Sanghvi Movers Capital Goods 366.48 279.12 101.45 777 170
89 Venky’s (I) Aquaculture & Hatcheries 602.59 44.71 21.99 139 168
90 Emami FMCG 681.12 115.43 58.19 3132 430
91 Kirloskar Electric Company Capital Goods 852.98 64.97 26.83 279 76
92 Chettinad Cements Cement & Cement Products 1227.06 499.47 -12.61 1218 408
93 Sree Rayalaseema Alkali & Allied Chemicals Chemicals 685.52 115.59 42.88 98 15
94 Jyoti Structures Capital Goods 1814.54 205.88 81.57 1257 153
95 Gillette India FMCG 691.52 158.41 113.14 3328 1087
96 GEI Industrial Systems Capital Goods 213.65 29.63 10.41 99 69
97 Venus Remedies Pharmaceuticals 276.21 63.35 42.27 222 225
98 Phoenix Mills Real Estate 143.9 65.42 82.8 2509 165
99 Walchandnagar Industries Capital Goods 626.19 53.48 26.84 835 210
100 Shiv-Vani Oil & Gas Exploration Services Oil & Gas 775.98 266.3 93.9 1509 345

The market price of the stock is taken on Oct 8, 2009. (Source)

If you look at the list, it is dominated by Capital Goods. 18 companies on the list are from Capital Goods sector. Cement sector with 10 companies is the next dominant sector. Does that tell you something? India’s infrastructure spend is on the rise and hence the rise of smaller companies. Some part of your portfolio should be there.

There are 6 companies from each of these sectors – Chemical, Consumer Durables and FMCG. Pharma and Infotech, surprisingly has only 5 companies on the list.

My favorite stocks in the list are – India Infoline, IL&FS Investment manager, Deccan Chronicle (not because of Deccan Chargers), Geodesic and CRISIL (credit rating company). No particular reason. What’s yours?

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