These three companies are growing profits the fastest—is it too late to buy? | Stock Market News

Profits remain the cornerstone of every business and investment strategy. Sustained profitability signals business success, and while large companies are expected to generate profits, several smaller players have also posted impressive gains amid a favourable economic environment. Using Screener.in, we identified India’s fastest-growing profit-makers.

To ensure meaningful results, companies with a market capitalization above ₹5,000 crore were shortlisted, eliminating penny stocks and smaller firms. We focused on companies with consistent net profit growth over the past seven years, excluding one-time profits and accounting for the disruptions caused by the pandemic. The objective was to spotlight firms that thrived both before and after the pandemic.

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Though initial results leaned towards the banking and finance sector, concerns about a potential slowdown in FY25 prompted a broader exploration into other industries. Additionally, the analysis includes companies that have only recently gone public but exhibit solid seven-year financial performance.

Here are the top three companies with the fastest profit growth.

#1 Ujjivan Small Finance Bank

Ujjivan Small Finance Bank serves underbanked and underserved customers across India, with a focus on expanding in Tier-2 and Tier-3 cities. The bank has steadily grown its gross loan book and deposits, with 43.7% of deposits coming from low-cost current and savings accounts (CASA).

Since FY18, Ujjivan has posted a CAGR of 110.48% in net profits, recording profits in six out of the past seven years. In FY22, it reported a ₹415 crore loss as pandemic-induced defaults, especially in small business loans, hit hard. However, the bank rebounded swiftly, turning the loss into a ₹1,100 crore profit in FY23 by restructuring loans.

Founded in 2017, Ujjivan debuted on the stock market in December 2019 to bolster its Tier-1 capital. The timing was unfortunate—its share price halved during the March 2020 market crash. Further setbacks in FY22 kept the stock under pressure until June 2022, when it staged a 300% recovery in tandem with economic revival and profit growth.

The bank’s strategic expansion into vehicle financing, including two-wheeler loans, positions it well for future growth. CRISIL predicts that product diversification and deeper market penetration will fuel the growth of small finance banks (SFBs), though rising deposit costs may slightly impact profitability.

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With a market cap of ₹7,662 crore, Ujjivan trades at a PE ratio of 6.09x, well below its five-year median of 9.2x and the industry median of 11.69x. It also trades at 1.37x price-to-book value, below its 1.8x median. Having issued dividends over the past two years, the stock remains a potential value buy, especially compared to other private banks.

#2 Tega Industries

Tega Industries ranks as the world’s second-largest producer of polymer-based mill liners, essential components used to grind and size mineral ores. In 2023, it expanded its portfolio by acquiring McNally Sayaji Engineering, adding equipment for crushing, screening, and material handling to its offerings.

Tega’s critical products ensure stable and predictable revenue streams, positioning it as a key supplier in the mining and mineral processing industry. Founded in 1976 by Madan Mohanka, the company has grown through strategic acquisitions and now operates 10 factories across 92 countries.

The company posted a 31.85% CAGR in net profits over the past seven years. Until FY23, 85% of its revenue came from international markets, but strong domestic demand emerged in FY24.

A promoter-led organization with a 74.78% promoter holding, Tega launched its initial public offering (IPO) in December 2021 as a pure offer-for-sale (OFS). Despite the OFS, the IPO saw 219x oversubscription, driven by high-net-worth individuals and institutional interest.

Since the IPO, Tega’s market cap has surged to ₹12,382 crore, with the stock gaining 200%. It currently trades at 59.2x PE, higher than its three-year median PE of 31.2x. While the valuation appears steep, the company’s consistent profits and product expansion suggest room for future growth.

#3 Linde India

Linde India, a subsidiary of BOC UK, is a leading manufacturer of industrial and medical gases—including nitrogen, oxygen, helium, and argon—serving sectors like steel, automotive, electronics, and healthcare. With over 80 years of market presence, Linde India also offers engineering services and supplies gas through pipelines, cryogenic tankers, and cylinders.

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The company achieved a 56% CAGR in net profits over the past seven years, supported by growing demand from key sectors aligned with government infrastructure investments and the automotive PLI schemes.

With a market cap of ₹71,615 crore, Linde’s engineering division boasts a ₹2,000 crore order book, compared to FY24 revenue of ₹768 crore. The company has zero debt and holds ₹3,349 crore in reserves, reinforcing its financial strength. Linde also maintains a regular dividend payout, enhancing shareholder returns.

For more such analyses, read Profit Pulse.

The stock has surged 2,200% since 2017, maintaining a 32% CAGR. Currently trading at a 163x PE ratio, the stock is valued well above its 10-year PE median of 109.8x and the industry median of 39.0x. While growth prospects remain strong, the stock’s high valuation may limit upside potential.

Conclusion

These three companies are paving the way for sustainable profit growth. While Linde India’s higher valuation suggests limited headroom, Ujjivan and Tega Industries offer relatively attractive valuations—though not necessarily cheap—indicating that the market may not have fully priced in their growth potential. With dividend payouts and capital appreciation, these stocks merit a spot on your watchlist for investors seeking long-term growth opportunities.

If you wish to access the full list of companies on screener.in, you can go here.

Disclaimer: This article relies on data from www.Screener.in. In cases where data was unavailable, we used other reliable and widely accepted sources.

The purpose of this article is to present engaging charts, data points, and thought-provoking insights—not to provide investment recommendations. For any investment decisions, consult your financial advisor. This content is intended for educational purposes only.

About the author: Puja Tayal is a seasoned financial writer with 17 years of experience in fundamental research. Her articles offer comprehensive, well-researched insights into companies, combining expertise with thorough analysis.

Disclosure: The writer and their dependents hold no stake in the stocks discussed in this article.