These companies present the opportunity for substantial long-term gains, driven by their ability to grow revenues and profits at a rate surpassing the market average. Often, these stocks outperform the broader market.
However, growth stocks can be more volatile and test investor patience, especially during market downturns.
Thorough research into these stocks is crucial. Identifying promising growth stocks based on key factors can be a rewarding endeavor for investors.New Delhi Investment
When evaluating growth stocks, pay close attention to revenue and profit performance, industry trends, return ratios, and any significant news.
By staying attuned to market changes and capitalizing on opportunities, investors can maximize positive trends while safeguarding their investments against potential risks.
In this piece, we will examine that are currently outperforming the Nifty and show potential for continued success.
Hindustan Aeronautics Ltd (HAL) is a public-sector . Established on 23 December 1940, HAL is one of the oldest and largest aerospace and defence manufacturers globally. It is the only Indian company specializing in manufacturing and maintaining aircraft services.
HAL develops, designs, manufactures, and supplies aircraft, helicopters, avionics, and communications equipment for both military and civil markets.
The company is aggressively pursuing exports by leveraging its range of indigenous products, particularly emphasizing the capabilities and safety of platforms like the LCA Tejas. The Defence Acquisitions Council has approved the purchase of 97 units of the Tejas Mark-1A fighter jets.
HAL has partnered with the European aerospace company Airbus to create a maintenance, repair, and overhaul (MRO) facility for the A320 family of aircraft in New Delhi. This partnership aims to boost the Make in India initiative and enhance India’s self-reliance in aircraft maintenance.
HAL plans to establish an MRO hub in New Delhi, offering a one-stop solution for commercial airlines, with a target to have the facility operational by November 2024.
In FY24, HAL’s revenue from operations grew by 12.8% to 303.8 billion, while its net profit surged by 30.1% to 76.2 billion.
During the financial year, HAL secured major orders worth more than 190 billion and repair and overhaul contracts exceeding 160 billion. The company’s order inflow includes the supply of 25 Dornier aircraft to the Indian Navy and engines for the MiG-29 aircraft of the Indian Air Force.
HAL’s management has exciting plans in the pipeline, including creating a new business division focused on boosting exports. As part of its expansion strategy, HAL is seeking global partners and opening export offices in specific locations.
While exploring new opportunities, HAL will continue to focus on its core business of upgrading aircraft, including avionics upgrades and integrating new weapon systems.
Zomato’s stock has become a significant turnaround story in the Indian stock market.
The company had a rocky start following its initial public offering (IPO), with the stock initially falling and facing significant criticism from investors concerned about profitability and growth prospects. This scepticism was rooted in the company’s high valuation at the time of its IPO and the challenges faced by tech startups in the market.
However, Zomato’s stock has witnessed a remarkable turnaround over time, driven by several positive factors.
One key factor has been the company’s continued growth in its core food delivery business and its expansion into new verticals such as grocery and nutraceuticalsBangalore Stock Exchange. The platform’s venture into hyperlocal delivery (Zomato Instant, Blinkit) and loyalty programs (Zomato Gold) offers promising new revenue streams.
In FY24, consolidated revenue from operations stood at 121.1 billion, up 71% from 70.8 billion in FY23.
The company has also achieved profitability. In FY24, the food delivery platform reported a consolidated net profit of 3.51 billion, a significant improvement from the consolidated net loss of 9.71 billion in FY23.
Zomato’s efforts to improve operational efficiency and reduce losses have been well-received by the stock market. The e-commerce arm of Zomato, Blinkit, increased its delivery charges by 11-35 in the Delhi and Mumbai regions, contributing to higher profits. Zomato also started charging a nominal platform fee of 2-5 for each order, further improving its margins.
Looking ahead, Zomato plans to expand Blinkit’s footprint in larger cities. India’s online food delivery market is projected to reach $16 billion by 2025, positioning Zomato as a frontrunner in a sector brimming with future potential.
Dixon Technologies is at the forefront of India’s electronics revolution.
As the country’s largest home-grown EMS player and the biggest manufacturer of LED TVs in India, Dixon produces for brands like Samsung, Panasonic, Xiaomi, TCL, and OnePlus.
The company also manufactures lighting products for Philips, Havells, Syska, Bajaj, Wipro, and Orient, as well as semi-automatic washing machines for clients like Godrej, Samsung, Lloyd, and Panasonic.
In addition, Dixon manufactures mobile phones and other hardware for companies like Acer, Motorola, Nokia, and recently added Xiaomi.
Since 2016, Dixon Technologies has been manufacturing mobile phones and their parts, with significant growth spurred by government’s production-linked incentive (PLI) scheme. These incentives have played a pivotal role in securing contracts and establishing collaborations with leading global mobile phone manufacturers.
As part of its strategic plan, the company aims to export 30% of its total production capacity over the next two to three years.
Recently, Dixon Technologies announced plans to manufacture Alphabet Inc.’s super-premium Google Pixel 8 smartphones in India. According to the company, Dixon’s first batch of India-made Pixels may hit the market as early as September 2024. The company may also produce older and upcoming models like the AI feature-heavy Pixel 9, which has a new design language, later this year.
Dixon Technologies has also signed a 15 billion agreement with Nokia to develop and manufacture telecom equipment, including fixed wireless access points and routers.
In FY24, Dixon reported consolidated revenue of 177.1 billion, compared to 122 billion in FY23, an increase of 45.2%. The company’s consolidated net profit stood at 3.75 billion, up 47% from 2.55 billion a year ago.
Tata Power has transformed into India’s undisputed energy powerhouse.
The company’s presence extends across the electricity value chain, including generation, transmission, and distribution. It boasts an installed generation capacity of 14 GW, of which 8.8 GW is from thermal sources, with the remainder from clean energy sources such as wind, solar, and hydro.
Tata Power aims to become the frontrunner in India’s clean energy revolution, investing heavily in building an expansive EV infrastructure and setting up EV charging stations across the country.
The company is also active in consumer-centric businesses such as solar rooftops, pumps, and microgrids. Tata Power holds 13% of the domestic solar module market, aiming to increase this share to 20% with the help of its new solar cell and module manufacturing unit in Tamil Nadu.
Tata Power’s subsidiary, Tata Power Solar, will have its manufacturing plant fully operational this year, increasing the company’s total installed solar module capacity to 4.9 GW, including a 600 MW annual capacity at its Bengaluru plant.
For the sale of its rooftop solar units, Tata Power will rely on its network of over 500 channel partners across 450 cities, planning to double this network to 1,000 channel partners within the year.
Tata Power Renewable Energy Ltd, an arm of Tata Power Group, has started commercial production of solar modules from its new plant in Tamil Nadu, with solar cell production set to commence in June 2024. This development is expected to boost several capacity-addition projects that require locally manufactured products. The new solar cell and module facility of Tata Power Renewable Energy produced about 130 MW of modules in the March 2024 quarter.
In FY24, Tata Power reported its highest-ever revenue and net profit at 615.42 billion and 42.8 billion, respectively, with revenue and profit growing by 10% and 12%, respectively. The company’s bottom line has now grown for 18 consecutive quarters.
Mahindra and Mahindra (M&M) is the flagship company of the Mahindra group, which has diverse business interests across the globe.
M&M operates through several segments: automotive, farm equipment, and others. The automotive segment comprises the sale of automobiles, spare parts, and related services. The farm equipment segment involves the sale of tractors and spare parts. The other segments include farm, construction equipment, power, and spares business units.
Since its inception in 1945, M&M has been a highly reputed brand in India for automobiles, with its cars among the most trusted and reliable in the market.
M&M is ready to ramp up again after streamlining its operations. Following exits from non-core businesses, which unblocked funds worth 13.9 billion, the company is now laser-focused on its expansion plans.
In FY24, M&M reported consolidated revenue and net profit of 1,390.8 billion and 112.7 billion, respectively, with the topline and bottomline up 15% and 25%, respectively, over the previous year.
The company has unveiled a massive investment plan of 370 billion over the next three years. This cash infusion will be spread across its various businesses, with the auto sector receiving the biggest chunk of the investment.
M&M is bullish on both electric vehicles (EVs) and internal combustion engine (ICE) vehicles, particularly SUVs. The plan is to aggressively develop both segments. The auto company aims to invest 140 billion in ICE vehicles by FY25 and 120 billion for the electric vehicle arm, Mahindra Electric Automobile (MEAL), over the next three years.
The farm equipment business, a major cash generator, will receive 50 billion. The services sector, encompassing companies like Tech Mahindra and Mahindra Holidays, will also receive 50 billion.
Growth stocks in India have garnered significant attention, especially in recent years, as the country’s economy continues to experience rapid expansion.
These stocks offer a great opportunity for investors to capitalize on India’s economic progress. However, before investing in growth stocks, it’s important to conduct thorough research and understand the risks involved.
Moreover, bear in mind that 2024, being an election year, introduces an element of uncertainty. These events usually add volatility to the stock markets, as changes in policies and regulations can impact the business environment and potentially affect company performance.
Happy investing.
Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such.
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