Portfolio: 2 Small Caps with ‘Highest’ EPS Growth!
Constructing a portfolio of small-cap companies is not easy, owing to their higher uncertainty regarding future prospects, managerial capabilities, sustainability of the financials, etc. But this is the space that rewards the highest if investors are able to pick the right companies and sit tight for a few years.
EPS (earnings per share) is one metric used quite often in the investing world to gauge the net earning attributable per issued share. Consistent growth in the EPS is a good measure to start off with when curating a portfolio of small companies. In that vein, here are 2 small caps from the index that have registered the highest EPS growth over the last 5 fiscal years
TV18 Broadcast Limited
TV18 Broadcast Ltd. (NS:) is a popular television broadcast network owning channels such as CNBC-TV18, CNBC Awaaz, CNN-News18, News18 India etc. and has a market capitalization of INR 5,485 crores. Although FIIs have reduced their stake over the last few quarters, they still hold 8.58% of the company.
FY22 was a record year for the company as it posted its highest-ever annual revenue of INR 5,655.12 crores, leading to a net income of INR 548.5 crores, at a profit margin of 10.34% (the highest since FY16). The EPS has grown from INR 0.04 in FY17 to INR 3.41 in FY22, which is a mammoth 146.6% 5-year CAGR growth. The lower base in FY17 is also a reason for this 3-digit growth rate.
Angel One Limited
Angel One Ltd (NS:), formerly known as Angel Broking is one of the largest stock brokers in the country, having a market capitalization of INR 9,356 crores and currently trades at a TTM P/E ratio of 11.3. Recently, it was selected among 15 QSBs (qualified stock brokers) in India by SEBI, which further adds to the robust presence of this stock broker.
FIIs have fallen in love with Angel One, as they have continuously been increasing their stake since the last 6 quarters, at least, currently holding 17.25% in the company. After the Covid-19 pandemic, the company has witnessed a sudden spurt in revenue, which is the story of the entire stock broking industry, all thanks to a strong wave of new investors in the markets. In FY22, it posted the highest-ever revenue of INR 2,305.07 crores and the EPS has grown from INR 4.32 in FY17 to INR 75.88 in FY22, depicting a 5-year CAGR of 77.4%.
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