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

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.

Small caps-Buy or ignore???

You may remember those days,not so long ago, when putting as much money as you can into small cap stocks was a fad among investors.It worked like crazy for a while... with many people dumping every penny they had into small caps and making huge returns quickly as a result of it.

But soon the markets started falling and the small cap game became a lot,lot harder.
Under-prepared and under-informed investors could no longer take small caps casually like they used to. And many of them found this out the hard way when they lost money awfully fast in small cap stocks.

Soon cries echoed from all across the investment community about how "Small Caps are Dead", "Small Caps are Worthless" and "Small Caps are Finished"...And they probably had a point. The game had gotten a lot harder.

But while most people were busy complaining and griping about this,some investors had knowingly or unknowingly discovered the secret to making 1,000% or more returns from small caps... and they were silently working their way towards it.

These investors were totally unfazed by the market changes because they knew they’d earn their profits regardless of whether the market went up, down or remained flat.

Aut first, there are a few FACTS that you need to know.
As you may know already, small caps have performed poorly in the last few months. And it has unfortunately led many investors to the conclusion that the 15 minutes of fame for small companies are over.

This is far from the truth!

The continued fall in the prices of small caps was triggered by a panic sell-off that started in the broader market due to the impact of financial crisis in the US.So, ALL small cap stocks across ALL sectors had crashed without discrimination.

Second... while small caps fall fast in general, they also rise equally fast.

Here are some randomly selected Small Caps stocks that prove this point (one stock we recommended is also in there)...

Small caps' fall is fast... and so is the rise
FALL RISE
Hindusthan National Glass -57.2 105.0
Jindal Poly Films Ltd. -50.2 91.9
Karuturi Global Ltd. -73.7 83.6
Madras Aluminium Co. Ltd. -67.4 64.4
Indo Tech Transformers Ltd. -38.5 61.4

Clearly, small companies are fast growers and it shows in their stock prices. And the best part is... small caps have the potential to be 10-baggers also!

However, there is one drawback when it comes to small caps..
While The Potential to Make Returns Is Huge,so Is The Risk Involved...

The problem is that many people don't understand this. Or they understand it but don't take it seriously.Smaller companies typically have fewer competitive advantages and financial resources to weather a market downturn. So, naturally, when there is a sell-off in the markets, small caps bear the brunt of it as they are more "risky" to hold.

And because of the size of small caps, it doesn’t take much money to drive their stock prices down faster.

Since the markets have crashed, should you start shifting all your money from small caps to government bonds, provident funds, post office deposits, fixed deposits, and large-cap stocks? You might have been told by others that it's the best thing to do right now.

But my answer to that would be - No, definitely not!

You see, while most stock brokers and investment firms push small caps as a way to make big returns in a short time, we believe they're as an extremely good "long term" investment.

Small caps have been proven to post better returns over the long run than large caps - returns often in excess of 1,000% over a 10-year period.

You don't have to take my word for it. Here are some real examples...

Let's say you had invested just Rs 15,000 in Hindustan Construction back in 1998. You'd have easily made almost Rs 286,422 by now. If you had invested Rs 15,000 in Pantaloon then, you'd have made around a whopping Rs 4,934,694 now!

So, adding a few small-cap stocks in your investment portfolio is one of the surest ways to multiply your wealth or is it??

The choice is purely yours.

Source: http://yachendra.blogspot.com/

India's fastest growing small companies

Companies with revenues less than Rs 1,000 crore that grew the fastest in 2007.

1. SunTV Network

Despite competition from ZEE and other regional channels, Chennai-based SunTV continues to remain top of the heap in southern India. At last count, it had 20 TV channels, 37 FM radio stations, two daily Tamil newspapers and four magazines. For the year ended March 2008, the Kalanithi Maran led media group reported revenues of Rs 810.60 crore and a net profit of Rs 332.7 crore—a 19.6 per cent and 34.7 per cent jump, respectively, over 2006-07. According to analysts, Sun is expected to maintain 18 per cent CAGR until 2010.

2. Indiabulls Fin. Services

Indiabulls financial services’ journey from a congested office near Hauz Khas in Delhi to swank Colaba (South Mumbai) has taken a little over eight years. Its revenue grew at a CAGR of 159 per cent and profits even faster at a CAGR of 184 per cent between 2002-03 and 2006-07. During the last financial year, it logged consolidated revenues of Rs 1,688.8 crore and consolidated PAT of Rs 580.60 crore— a jump of 110 per cent and 91 per cent, respectively, over the previous year. Yet, its market cap has plunged steeper than the Sensex, from a peak of Rs 24,823 crore in December, 2007 to Rs 10,711.09 crore at present (on May 22). So why aren’t investors too impressed with Indiabulls?

3. Shri Lakshmi Cotsyn

While most of the players in the textile industry are still reeling under the impact of a stronger rupee, Kanpur-based Shri Lakshmi Cotsyn (SLCL) makes growing in the face of adversities seem like a cinch. For its financial year ending June 2008, SLCL, which manufactures denim, terry towel, home furnishing, nylon and apparels, expects to clock revenues of around Rs 900 crore, up 40 per cent from last year. Says M.P. Agarwal, CMD, SLCL: “We expect our net profit to cross Rs 60 crore in 2008-09 (Rs 36.32 crore last year).” The reason, as Agarwal explains, is largely the aggressive capacity expansion.

4. Bombay Rayon Fashions

Our performance over the years has been very good,” says A.R. Mundra, BRFL’s Executive Director, a bit modestly. “We have been doubling our top line as well as bottom line year after year (for three years now).” Driving the Rs 239-crore company’s growth is its investment in capacity expansion; by December ‘08 it plans to increase its garment making capacity from 64,000 pieces a day to 200,000 pieces a day.

5. Cholamandalam DBS Finance

Ever since DBS invested in this company two years ago, Cholamandalam has expanded its portfolio of loans and tapped newer cities. Loan disbursements have jumped from Rs 3,104 crore in 2006-07 to Rs 5,150 crore last year. What’s ahead for Chola? “We will target SME products, extend home equity loans across the country, expand e-broking, look to finance construction equipment,’’ says Atul Pande, Managing Director.

Top 10 fastest growing small companies in India

Growth is the only way listed companies generate wealth and value for their shareholders and other stakeholders, including employees. The younger and smaller the company, easier it is to grow. And the earlier you are able to pick future leaders, the better it is for you. In fact, during the last bear run, which ended in early 2003, many small companies gave double-digit annual returns on a consistent basis, even as frontline companies remained grounded.

ETIG has come out with its 2008 edition of fastest-growing small companies. Last year's list was dominated by companies from the then hot sectors such as real estate, capital goods and construction, with a sprinkling of IT companies. However, the toppers this time are now from less cyclical and asset-light sectors, especially infotech.

Take a look at the top 10 fastest-growing small companies:


ICSA India
This is the new face of the Indian IT industry — companies offering niche product and services with a clear differentiating factor. ICSA offers supervisory control and data acquisition (SCADA)-based IT solutions to power companies.

ICSA India had a market cap of Rs 1,305.2 crore (the average for September '08), besides having an average return on capital employed (RoCE) of 67.8% and interest coverage ratio (ICR) of 132.7, for the preceding three years.

Also, its compound average growth rate (CAGR) in sales and net profit for the preceding three years stood at 214.8% and 210%, respectively.

Allied Digital provides remote infrastructure management and systems integration in the domestic market. It is a leading IT Infrastructure management and technical support services outsourcing company.

It enables global, large and medium enterprises and service providers to reduce their total cost of ownership using a combination of onsite and remote services.

With an average market cap of Rs 1,239.2 crore in September '08, the company's three-year average RoCE stood at 62.8% and ICR at 103.5. Moreover, its sales recorded a three-year CAGR of 79.2%, while the CAGR of profit after tax stood at 211.6%.


As the name suggests, Prime Property Development Corporation is a real estate developer in India, based in Mumbai.

Its properties include information technology parks; commercial units comprising show rooms, shops, and offices; mall projects with anchor shop, shopping complex, multiplex, food court, entertainment area, and a hotel; and commercial-cum-residential projects.

The company had a market cap of Rs 120.2 crore (the average for September '08). Its three-year average RoCE stood at 48.1% and ICR at 394.7. Its sales recorded a three-year compound average growth rate of 86.4%, while the CAGR of profit after tax stood at 185.3%.

Resurgere Mines and Minerals India Ltd

Resurgere Mines and Minerals India Ltd is engaged in the business of extraction and processing of iron ore products, ie lump ore and size ore, and is predominantly a manufacturer of calibrated lump ore (CLO) and iron ore fines.

It is also engaged into merchant export of iron ore fines to China. The company is a member of CAPEXIL, FIEO and FIMI and is a recognized star trading house. At present, the company has run-of-mines contracts for two mines situated at Nuagaon and Maharajpur in Orissa.

Resurgere Mines' market cap (average for September '08) stood at Rs 733.5 cr, while the three-year average RoCE was recorded at 100.2% and ICR at 32.8. Its sales recorded a three-year compound average growth rate of 81%, while the CAGR of profit after tax stood at 561.4%.


The success of Sharon Bio-Medicine lies in its ability to expedite pace of product development by streamlining the processes and inculcating a culture of operational excellence. It offers contract research and manufacturing services for global pharmaceutical companies.

Since its inception, the company has carved its niche by offering a distinct value proposition to its customers.

Sharon had a market cap of Rs 101.7 crore (the average for September '08). Its three-year average RoCE stood at 30.8 % and ICR at 747.8. Its sales recorded a three-year compound average growth rate of 93.3%, while the CAGR of profit after tax stood at 254.2%.


Tanla Solutions develops value-added solutions for mobile phones. It offers end-to-end mobile commerce, mobile entertainment, mobile internet and mobile advertising solutions.

Tanla is a global provider of mobile commerce, mobile entertainment, mobile marketing and advertising solutions to the telecommunications, media and digital content industries. It has the distinction of being one of the first Indian companies to focus on integrated solutions and products for the wireless world.

With an average market cap of Rs 1,906.9 crore in September '08, the company's three-year average RoCE stood at 51.1% and ICR at 15.8. Moreover, its sales recorded a three-year CAGR of 173.8%, while the CAGR of profit after tax stood at 189.8%.


Northgate Technologies Limited
The corner stone capabilities of Northgate Technologies' business are infrastructure (high capacity, highly scalable server farm), services (internet advertising tracking tool, instant messaging, short messaging, net telephony, global content delivery, video streaming, social networking, file sharing and downloading, gaming and many more), and monetization (mass monetization through fast growing global internet advertising industry).

Its core strengths of world-class server farm infrastructure, a rapidly-expanding global content distribution platform, popular internet properties, partnership with large web communities and own advertising network differentiates it from other peers who operate in only sector, the company claims.

Northgate Tech's market cap (average for September '08) stood at Rs 904.9 crore, while the three-year average RoCE was recorded at 31% and ICR at 1141.4.

Its sales recorded a three-year compound average growth rate of 102.1%, while the CAGR of profit after tax stood at 110.9%.



Venus Remedies India is a research and development driven, pharmaceutical manufacturing company. The company is constantly working to broaden the pipeline of products and to make a impact in the international markets.

It has two manufacturing locations in India and one in Germany. Venus is a manufacturer of oncological and cefelosporine injectable products following EU-GMP norms for all is activities.

The company had a market cap of Rs 316.9 crore (the average for September '08), besides having an average return on capital employed of 43.2% and interest coverage ratio of 59.5, for the preceding three years.

Also, its compound average growth rate in sales and net profit for the preceding three years stood at 84.4% and 117.5%, respectively.


Geodesic Limited

Geodesic operates in a niche area of developing various innovative products in the information, communication and entertainment space. Its product-list is versatile and all-encompassing when it comes to offering choice of communication and collaboration solutions to its users, whether it is the inherently simple hand-held Simputer to web-based mobile & wireless applications to the intricately complex Engage Spyder applications.

Geodesic's mix of innovative products and high performance solutions has driven the company to profit right from its first year, according to the company.

With an average market cap of Rs 1,511.5 crore in September '08, the company's three-year average RoCE stood at 31.1% and ICR at 1027.3.

Moreover, its sales recorded a three-year CAGR of 98.9%, while the CAGR of profit after tax stood at 98.2%.


Info Edge (India) Ltd

The company is a leading provider of online recruitment, matrimonial & real estate classifieds and related services in India.

Its business is managed primarily through four divisions, which comprise online recruitment classified division, online matrimonial classified division, online real estate classified division and offline executive search division.

Info Edge's market cap (average for September '08) stood at Rs 2,056.7 crore, while the three-year average RoCE was recorded at 60.4% and ICR at 11.4.

Its sales recorded a three-year compound average growth rate of 70.6%, while the CAGR of profit after tax stood at 451.8%.

Source: Economic Times