Investing in growth stocks can significantly boost your wealth in the stock market. To succeed, you need to identify the right growth stocks and timing.
In 2022, many of the top growth stocks India experienced substantial losses, with the S&P 500 index plummeting over 19% and the S&P 500 Growth index dropping 30%. Some stocks fared even worse, losing half or two-thirds of their value. However, during the first half of 2023, growth stocks made a strong comeback, surpassing the broader market. This suggests potential for continued outperformance.
To help you begin your journey into growth stock investing with the ideal stocks for future growth, we offer a practical guide equipped with tools and strategies to position your portfolio for long-term success. Now, let’s understand what is growth stock.
What are Growth Stocks?
Growth stocks exhibit a growth rate that is much higher than the market’s average growth rate. It shows that the stock grows faster than the market’s average stock, which causes earnings to increase faster. These stocks don’t pay dividends.
Many small-cap stocks are considered fast high growing stocks in India. However, some larger companies may also be growth companies.
Now that we know what is a growth stock, let’s look at some of the top companies that have experienced share growth.
Trending Growth Stocks List in 2024
Here’s a list of best high growth stocks India for 2024. These are the best share to buy for growth and the best growth stocks to buy now in India, potentially:
|Market Cap (in Cr)
|Jindal Stainless Steel
|Adani Green Energy
Please note that the above list is for educational purposes only, and is not recommendatory. Please do your own research or consult your financial advisor before investing.
Note: The data in the growth stocks list in India is from 24th January 2024. However, for real-time updates on growing stock prices and market trends, visit the smallcase stocks collection today!
Why Invest in Growth Stocks?
The fastest growing stocks in India may provide you higher capital growth as compared to any other type of stock. These businesses grow at a pace that is much faster than the industry average. Thus, investing in growth companies can increase the value of your money over the long and short terms. Given optimal market circumstances and price rise over the long run, your money may even double with further compounding.
Your money may outperform inflation by investing in the best growth stocks India. Thus, according to financial experts, the true growth of your money is the growth rate minus inflation.
However, investors should always be mindful about their investment goals and risk appetite before purchasing any high growth stocks India, thorough research of the market conditions and stock performance would always help them gain the financial freedom.
Top Trending Growth Stocks in India
Here is an overview of the best growing stocks in India. These are some of the fastest-growing stocks in India.
Jindal Stainless Ltd
Considered as the best share to buy for long term, Jindal Saw Limited is engaged in manufacturing stainless steel. Its products include slabs, blooms, hot rolled (HR) coil, cold roll (CR) coil, plates, coin blanks, precision strips, blade steel and stainless steel plumbing. On a trailing 12-month basis, it generates an operating revenue of Rs. 31,903.26 Cr, demonstrating a remarkable annual revenue growth of 68%. It maintains an acceptable pre-tax margin of 7% and achieves an exceptional return on equity (ROE) of 17%. Therefore, it is one of the most precious among the best growing stocks in India making it also one of the best stocks to buy for long term growth. It is one of the ideal growing companies in India to invest in.
Polycab India is a manufacturer and seller of wires and cables and fast moving electrical goods. The company’s product line includes electric fans, LED lighting and luminaires, switches and switchgears under the ‘POLYCAB’ brand. On a trailing 12-month basis, it records an operating revenue of Rs. 15,260.60 Cr, highlighting an impressive annual revenue growth of 16%. It maintains a robust pre-tax margin of 12% and achieves an exceptional return on equity (ROE) of 19%. It is one of the best stocks to buy in India for long term 2024, among growth stocks India.
Deepak Nitrite Limited is a chemical manufacturing company. The company’s segments include Bulk Chemicals and Commodities (BCC), Fine and Speciality Chemicals (FSC), and Fluorescent Whitening Agent (FWA). On a trailing 12-month basis, it generates an operating revenue of Rs. 7,682.41 Cr, showcasing an outstanding annual revenue growth of 17%. Thus, it maintains a healthy pre-tax margin of 14% and achieves an exceptional return on equity (ROE) of 20%, making it one of the best stocks to invest for long term growth.
Bajaj Finance Ltd
Bajaj Finance, one of the high growth stocks India boasts an impressive operating revenue of Rs. 48,019.96 Cr. over the past 12 months, showing a remarkable annual growth of 31%. The pre-tax margin stands at an impressive 38%, while the ROE reaches an exceptional 21%. It is one of the best long term stocks to buy in India for growth.
Adani Green Energy
Adani Green Energy generated an impressive operating revenue of Rs. 8,967.00 Cr. over the past 12 months, showcasing a remarkable annual growth of 55%. Notably, the pre-tax margin stands at 18%, reflecting a strong financial performance, while the ROE is a commendable 16%. It is also one of the best long term investment stocks to buy for growth in India.
Varun Beverages Ltd being one of the high growth stocks India achieved an impressive operating revenue of Rs. 15,589.13 Cr. in the last 12 months, boasting an outstanding annual growth of 49%. Notably, the pre-tax margin stands at a commendable 15%, while the exceptional Return on Equity (ROE) is 29%. It can be considered as the best share to buy for long term growth in India.
KEI Industries generated an impressive operating revenue of Rs. 7,467.99 Cr. in the past 12 months, boasting a remarkable annual growth of 21%. The pre-tax margin stands at 9%, while the exceptional Return on Equity (ROE) is 18%. It is one of the best growth stocks to buy now in the country.
Avanti Feeds generated a revenue of Rs. 5,027.73 Cr. in the last 12 months. While the 1% annual revenue growth is modest, the 8% pre-tax margin is acceptable, and the 13% return on equity (ROE) is commendable. It is one of the best long term stocks India for growth.
JSW Steel generated a robust operating revenue of Rs. 172,893.00 Cr. in the last 12 months, marking a commendable annual growth of 13%. While the ROE stands at a fair 6%, there’s room for improvement in the pre-tax margin, currently at 3%. It is also one of the best growth stocks to buy in 2024 in the Indian stock market.
Investing in High Growth Stocks India via smallcase
You can also invest in a basket of high growth stocks in India via smallcase. Simply go to smallcase.com or the smallcase app, and log in via your phone number. Then, go to ‘Discover‘ and then click on ‘All smallcases‘. There you can filter the smallcases based on ‘investment strategy’ by selecting ‘growth’. You’ll find an array of stock portfolios that are based on the growth investing strategy. Thus, just pick the best growing stocks in India that fit your investment criterion.
Make sure that you do your diligent research before picking the best growth stocks for the next 10 years in India, keeping in mind your long-term investment goals and risk appetite.
How to Invest in Growth Stocks?
Top growing stocks in India can be valuable to any investment portfolio, providing diversification and potential returns.
One way to invest in growth shares in India is through traditional stock market investing. Therefore, this involves researching individual companies and buying shares of stock directly.
Another way to invest is via exchange-traded funds (ETFs). Investors can choose from various growth-oriented ETFs, which provide exposure to a diversified portfolio of growth companies.
Mutual funds are another option for investing in growth shares. These are professionally managed investment portfolios that pool money from multiple investors to buy a diversified portfolio of stocks. Like ETFs, there are a variety of mutual funds that focus on growth investing.
However, if you’re confused about which stocks to pick, you can explore smallcases:
- smallcases are readymade portfolios of stocks/ETFs, that are based on a theme idea or strategy
- They’re created and managed by SEBI-registered experts
- smallcase.com offers over 200+ stock portfolios, created by 180+ managers
- Some of the popular smallcases among new investors are as follows:
Disclosures for aforementioned smallcases
How to Identify Growth Shares?
You can easily identify the best future stocks in the growth industry by following these factors.
- High Growth Potential: Look for companies that have a history of high revenue and earnings growth.
- Strong Market Position: Identify companies that have a dominant position in their industry, with a strong competitive advantage.
- Innovative Products/Services: Look for companies that have a pipeline of innovative products or services that have the potential to disrupt their industry.
- Experienced Management Team: Companies with experienced and competent management teams are better positioned to navigate market challenges and drive growth.
- Large and Expanding Market Opportunity: Identify the best growth stocks for the next 10 years in India by researching the companies that are operating in markets with significant potential for growth.
What are the Various Features of Fast Growing Shares?
Some of the features of the best stocks in the industry have been listed below:
- Risky Investment: Growth stocks have a higher potential for future returns, but they also carry a higher risk than other investing categories like value stocks or corporate bonds. The primary threat is that the actual or anticipated growth won’t carry over into the future.
- High P/E Ratio: Any sector or industry may have growth stocks, which often trade at a high price-to-earnings (P/E) ratio. Thus, they might not be making money right now, but they might in the future.
P/E ratio = market value per share / earnings per share
- High PEG Ratio: Price earnings to growth ratio is a ratio that is taken into consideration to evaluate a growth stock. The key benefit of PEG ratio over P/E ratio is that it accounts for the annual increase in the overall profits per share of a company. A high PEG ratio suggests that a company has performed very well.
- High RoE: Companies in India that raise money through high growth stocks India often have a record annual return on total equity. Higher the RoE, more valued growth stocks.
Who Should Invest in Growth Stocks?
Investing in high growth stocks India is tailored for individuals who are inclined towards risk and seek substantial returns on their overall investment. These stocks are characterized by their potential for significant capital appreciation, making them suitable for those comfortable with volatility in pursuit of higher rewards.
Ideal candidates for growth stock investment are investors who prioritize long-term wealth accumulation over immediate income generation. Since high growth stocks India often reinvest profits into the company rather than distributing dividends, they align with the objectives of individuals seeking wealth appreciation through capital gains.
Moreover, those with a keen interest in company analysis and market trends can identify the best growth stocks and their issuing companies. Understanding the factors that contribute to a company’s growth potential empowers investors to make informed decisions in this dynamic and often unpredictable segment of the stock market. Therefore, for individuals willing to weather market fluctuations in exchange for the potential of substantial returns, growth stocks can be a strategic addition to their investment portfolio.
What are the Alternate Options for Growth Stocks?
Growth stocks are highly volatile and are only meant for people with a high-risk appetite. Investors who don’t see growth stocks fit in their portfolio can look at value stocks.
Shares of companies that are trading at a discount are known as value stocks. Value stocks often have strong dividend payout ratios and the price of the stocks is typically lower compared to other stock categories since they are undervalued.
What are the Risks of Investing in Growth Stocks?
Let’s have a look at the potential risks of future stocks to invest in the growth industry.
- Volatility and risk of price fluctuations due to market conditions and changes in investor sentiment
- Dependence on market conditions that can affect the company’s growth potential
- Possibility of market saturation as competition increases and growth slows down
- Risk of overvaluation, where the company’s stock price becomes detached from its fundamentals
What are the Advantages of Investing in High Growth Stocks?
Here is a list of advantages of investing in the best future stocks of the growth industry.
- Potential for high returns on investment as a result of the company’s strong growth trajectory
- Diversification of portfolio with exposure to different industries and sectors
- Protection against inflation as the company’s earnings grow over time
- Long-term growth potential for sustained returns
How to Build a Growth-Oriented Investment Portfolio?
- Fundamental analysis to evaluate the company’s financial health, management, and competitive advantage.
- Technical analysis to identify trends and patterns in the company’s stock price
- Growth investing strategies that focus on high-growth companies with a long-term perspective
- Value investing strategies that focus on undervalued companies with strong fundamentals
However, investors must do their own research and/or consult their financial advisor before investing.
To Wrap It Up…
In conclusion, investing in growth stocks can be a lucrative strategy for investors looking to maximize their returns over the long term. Therefore, with the right research and strategy, investors can potentially capitalize on the growing share price of these high growth stocks in India.
The following are the fastest growing stocks in India 2024. These are the best shares to buy for long term in India are:
1. Jindal Stainless Ltd
2. Polycab India
3. Deepak Nitrite
Note: This list is for educational purpose only and not recommendatory
You can invest in a basket of high growth stocks in India via smallcase. Simply go to smallcase.com or the smallcase app, and log in via your phone number. Then, go to ‘Discover‘ and then click on ‘All smallcases‘. Filter the smallcases based on ‘investment strategy’ by selecting ‘growth’.
Considering each stock individually and closely evaluating their valuations is crucial. The first half of the year has ended, bringing smiles to growth stock investors. Thus, many companies, previously challenged in 2022, have not only rebounded but exceeded expectations. However, you must be careful as an investor and make sure to choose the best stocks for future in your portfolio.
Investing in growth stocks can be ideal for investors seeking faster wealth growth. Those who intend to select the growth stock should possess an appetite for higher risk. However one must evaluate their investment goals and risk appetite before investing in the best share to buy for long term.
Growth stocks can offer investors the potential for very high returns, primarily through long-term capital gains. Keep in mind that even the best stocks for future do not have such guaranteed returns. Investors must evaluate both growth potential and challenges before investing in the best growth stocks for the next 10 years in India.
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