Fastest Growing Stocks in India (2023): How to select the best ones?

Last updated:
Top growth stocks

Best Growth Stocks to Invest

Investors use various strategies to maximize their profits in the stock market. One such strategy is to buy stocks that are expected to rise or simply the growth stocks India. These stocks are offered by companies that have higher chances of growth and expansion at a rate that is faster than the average growth rate. If you're also planning to invest in top growth stocks in India, then this article is for you. In this article, you will learn about the fastest growing stocks in India along with a helpful guide to selecting the right stocks for your portfolio. 

Summary in Brief 

  • What Are Growth Stocks? 
  • Characteristics of Growth Stocks
  • List of Top Growth Stocks India 
  • How to Select the Best Growth Stocks in India 
  • Frequently Asked Questions 

What Are Growth Stocks? 

Growth stocks are the stocks of companies or firms that are expected to grow their revenues and profits at a much faster rate than the average companies in the market or the respective industry. 

Growth stocks are among the hottest choices of investors mainly because they are likely to grow their wealth in a short span of time and help them fulfil their financial goals. The fast growing companies in general, have solid leadership teams that are focused on innovation and lucrative market opportunities. Such companies often stay on the top of popular trends like fintech and eCommerce. 

One good example of this type of company is Amazon, which has been a market leader since the time it started selling books on its online platform in 1995. Other examples include Square which introduced digital payment to small businesses and Alphabet which took digital advertising to another level. 

Growth investing is acquiring new market share and increasing the value of an existing business by investing in new products, services, or businesses. One can do this through several strategies, including venture capital investment, acquisitions, and product development.

Characteristics of Growth Stocks

To select the right growth stocks in India, it is important to understand their features and characteristics. Having said that, below are the key features of high growth stocks India:

1. Higher Growth 

As the name suggests, growth stocks offer significantly higher growth as compared to the other types of stocks. This means that these stocks grow much faster than the other stocks available in the market. 

2. NIL or Low Dividends 

One important thing to note about growth stocks is, they don't usually pay dividends and even if they do, the amount is very low. This is mainly because these companies are growing at a very fast rate, and hence they prefer reinvesting their earnings back to speed up their revenue generation and expand their business. 

3. Have Competitive Advantage 

Growth stocks are able to have a higher growth rate because they have some level of competitive advantage over others in the same sub-sector or industry. This competitive edge provides them with a strong USP (Unique Selling Point), which allows them to sell and grow better than the competitors. 

4. Ideal for Long-term 

Because growth stocks don't pay dividends or pay negligible amounts, investing with short term goals doesn't benefit from them. However, the scenario is completely different for long-term investors. They can generate attractive revenues through higher capital gains because the growth companies experience manifold growth in the long term. 

5. Risk factor

Stock market investments always involve some degree of risk. Growth stocks are not an exception in this case. While these stocks look very attractive and can help you generate higher profits, the level of risk associated with them in the short term contributes to higher risk. This is the reason why it is advisable to invest in growth stocks for the long term. 

6. Have Loyal Customer Base 

Because growth companies have a great competitive edge over their competitors within the same industry, they have a loyal and satisfied customer base. The USP these companies have ensures a constant growth of the customer base which in turn contributes to their higher growth rate. 

7. Risks of Growth Investing

There are several risks to growth investing, including the risk of becoming too risky, the risk of missing opportunities, and the risk of not having enough return on investment.

8. Growth vs. Value Stocks 

There are several different ways to look at growth and value stocks. One way is to look at how much money a company makes each year versus how much it costs to make that same amount. Another way is to look at how much the company is worth relative to its peers. The third way to look at growth and value stocks is to compare them against one another. Growth and value stocks are different types, but they can be successful if they focus on creating value for investors.

List of Top Growth Stocks India 2023

Stocks Market Capitalization (₹ Cr) P/E Ratio 
Adani Greens 1,91,248130
AU Small Finance Bank50,95831.7
Polycab India 80,42850.0
KEI Industries 26,40050.0
Avanti Feeds 5,40915.9
Bajaj Finance 4,56,22534.8
Britannia 1,19,31553.6
JSW Steel2,00,29522.6

(Data as of December 1, 2023)

Disclaimer: The securities quoted are exemplary and not recommendatory. Past performance is not indicative of future returns

Top Growth Stocks by EPS and Revenue

India's fast-growing economy and population are expected to increase the demand for food and other products. Because of this, the stock of food firms will go up. India's six best food stocks are Wipro, Hindustan Times, Tata Sons, Infosys, Larsen & Toubro, and JSW Steel. 

NameEPS (₹)5Y Return (%)Current Price (₹)
AXIS BANK42.613.41,143
COAL INDIA45.58.07356
TATA MOTORS46.234.1711
DR REDDYS LAB30616.95,794
ICICI BANK57.523.31,007
EICHER MOTORS13113.54,167
BAJAJ FINANCE21725.07,376
TITAN COMPANY37.231.03,507
BHARTI AIRTEL13.530.41,044

(Data as of December 1, 2023)

Disclaimer: The securities quoted are exemplary and not recommendatory. Past performance is not indicative of future returns

Top Growth Stocks by Sales Growth

It is anticipated that India will overtake China as the country with the most people living in it by 2023. It is anticipated that India, which has a population of more than one billion people, will have an even greater economic growth rate than the current worldwide average. Many high-growth equities call this region the world home, and it is projected that they will increase at a phenomenal speed in the years to come.

(Share Price as of December 1, 2023)

Disclaimer: The securities quoted are exemplary and not recommendatory. Past performance is not indicative of future returns

Top Growth Stocks by EPS and Revenue

India's fast-growing economy and population are expected to increase the demand for food and other products. Because of this, the stock of food firms will go up. India's six best food stocks are Wipro, Hindustan Times, Tata Sons, Infosys, Larsen & Toubro, and JSW Steel. With a revenue rise of 74%, Wipro is the company that is expanding at the highest rate.

Risks associated with stocks in India

There are several risks associated with investing in stocks in India. These include the potential for price manipulation, political instability, and a lack of regulatory certainty. Additionally, the current economic climate may cause inconsistencies in stock prices, which could lead to a loss of value.

How to Select the Best Growth Stocks in India 

Below are the characteristics you should consider at the time of selecting the right growth stocks for your investment:

1. Higher Profit Margins 

The best growth stocks are from companies with higher profit margins that are also increasing at a constant rate. Note that the negative profit margins can turn positive and generate dramatic returns when you hold the share for a long time. This can help you build a stunning portfolio. Moreover, companies that are growing at a faster rate and earning profit also keep increasing their profit margins. Such companies are generally more suitable for beginners as they offer low-risk as compared to others. 

2. Solid Sales Growth 

Companies that are growth-oriented increase their revenues significantly over time. The reason behind this is that the only way to maximize profits is to grow the revenues as well. 

3. Projected Earnings of Company 

When an analyst projects that a company's earnings are likely to increase, it is a positive indicator. Although the projections of analysts aren't always accurate, they are great for gauging market trends and performance. 

4. Higher RoE (Return on Equity) 

Return on Equity or ROE is equivalent to the net income of a company in terms of its shareholders' equity percentage. A company with higher RoE as compared to its competitors uses the capital in a more effective way to generate and grow profits. 

5. Manageable Debt 

Because it is possible to have a higher ROE through higher amounts of debt, it is very crucial to evaluate the liabilities of the shortlisted company. Make sure that the ROE of a company is not influenced by the debt it holds. Further, compare the debts of the given company with its competitors. Also, the past performance of the company should show a manageable debt trend. That's all. 

6. Identify trends and the companies driving them

There are several factors you can use to identify growth stocks in India. Trend analysis can help identify companies making headway and are likely to continue doing so. In contrast, company news and rumors can give you insights into what is going on at your target company. Company announcements and events can also be a good source of information about upcoming new products or services or about changes at the company itself. Finally, keeping an open mind when investing in growth stocks is essential. Different companies will perform differently at different times, and no one stock will outperform the rest for an extended period.

7.  Find companies with large addressable markets

Finding businesses that have sizable potential customer bases is vital if one wishes to achieve optimal growth rates. One is able to investigate the company's performance as well as its size and market statistics.

Key Takeaway 

Growth stocks are great investment options for investors who are willing to take a moderate risks and want to enjoy higher returns on their investment over the long term. We have discussed the best growth stocks in India along with the guide to selecting the best for your portfolio. We hope this information helps! 

Important things to remember:

1. Do Not Blindly Follow Hot Tips

No matter how credible the source is, never follow a stock marketing tip blindly without conducting thorough research personally. Always select the stocks after doing proper research and analysis on the performance as well as the companies. While some tips can work out to give you huge benefits, the wrong ones can push you down under the risk pretty quickly. 

2. Eliminate Loser Stocks from Portfolio 

There is absolutely no guarantee that a stock will rise after a great fall. Know that it is extremely important to be practical about what is possible and what's impossible in the stock market. So, upon realizing that a stock is performing poorly in your portfolio, accept your mistake and sell it immediately to prevent further losses. 

3. Don't Exceed Your Investment Budget Abruptly 

While it's true that long-term investments are way better than other forms of investment, you shouldn't exceed your investment budget in a haste. Instead, decide on a fixed amount and invest it across various good stocks. Rather than investing in only one stock, divide your budget evenly across multiple good-performing stocks and shares. 

  • Which sector will grow in next 10 years?

  • Are growth stocks good for beginners?

  • Which is the best high growth stock in India?