Portfolio Stocks: 3 ‘Fastest-Growing’ Nifty 50 Companies!
Whenever investors screen stocks to add to their portfolios they must have crystal-clear quantitative parameters to filter stocks that justify their thesis. For instance, EPS growth is one parameter that is one of my favorites when it comes to filtering stocks that are showing consistent earnings growth in the business.
EPS or earnings per share is simply the net earnings of a business divided by the outstanding shares and gives the profit figure pertaining to each share. Growth in the EPS is generally one of the most important metrics shareholders look to gauge the financial performance of the business as it is the net figure that shareholders are entitled to after all the expenses and accounting adjustments. Listed below are 3 companies from the premier index that are clocking the highest growth in EPS over the last 5 years.
State Bank of India Limited
The first one on the list is State Bank Of India (NS:) which has a market capitalization of INR 5,17,314 crores, making it the largest public bank in the country. After the Covid-19 pandemic, the bank has shown an exceptional recovery in share price, surging from the May 2020 low of INR 149.45 to an all-time high of INR 586.2, marked a couple of days back.
The massive recovery in the share price has been on the back of strong financials, as it posted the highest-ever revenue of INR 4,06,973 crores in FY22, which consequently led to a 57.88% YoY increase in net income to INR 35,373 crores, translating into an EPS of INR 39.64, which was a mere INR 0.31 in FY17. This is a massive 5-year CAGR of 164%. No other company in the index comes even close to this.
Hindalco Industries Limited
Hindalco Industries Ltd. (NS:) is the second-fastest growing company in the Nifty 50 list on the above-mentioned parameter. This miner has a market capitalization of INR 92,343 crores and trades at a P/E ratio of only 6.73, compared to the sector’s average of 13.34.
The company clocked a record profit of INR 13,730 crores in FY22, which is a mind-boggling 294% higher than last year’s profit of INR 3,483 crores and the EPS which stood at INR 8.89 in FY17 surged to INR 61.74 in FY22, depicting a 5-year CAGR of 47.36%. FIIs hold a significant stake of 24.76% in the company while mutual funds also own 13.15%. As I always mention, investors need to be extra vigilant in commodity-based businesses due to their cyclical nature.
JSW Steel Limited
JSW Steel Ltd (NS:) is engaged in the business of production and distribution of iron and steel products and has a market capitalization of INR 1,63,281 crores. The company also recorded a massive profit jump of 161.22% in FY22 to INR 20,665 crores on account of higher commodity prices. Over the last 5 years, the market share has also risen from 15.41% to 19.85%.
The increased profit bumped up the EPS to INR 68.51 in FY22, which was only INR 11.7 in FY17, depicting a 5-year CAGR of 42.4%. The icing on the cake is, the company is also trading at a dividend yield of a good 3.21%.
These 3 companies mentioned above are the only ones in the Nifty 50 index that have clocked a 5-year CAGR in EPS of over 40% and all 3 of them posted the highest-ever earnings in FY22.
Whenever investors screen stocks to add to their portfolios they must have crystal-clear quantitative parameters to filter stocks that justify their thesis. For instance, EPS growth is one parameter that is one of my favorites when it comes to filtering stocks that are showing consistent earnings growth in the business.
EPS or earnings per share is simply the net earnings of a business divided by the outstanding shares and gives the profit figure pertaining to each share. Growth in the EPS is generally one of the most important metrics shareholders look to gauge the financial performance of the business as it is the net figure that shareholders are entitled to after all the expenses and accounting adjustments. Listed below are 3 companies from the premier index that are clocking the highest growth in EPS over the last 5 years.
State Bank of India Limited
The first one on the list is State Bank Of India (NS:) which has a market capitalization of INR 5,17,314 crores, making it the largest public bank in the country. After the Covid-19 pandemic, the bank has shown an exceptional recovery in share price, surging from the May 2020 low of INR 149.45 to an all-time high of INR 586.2, marked a couple of days back.
The massive recovery in the share price has been on the back of strong financials, as it posted the highest-ever revenue of INR 4,06,973 crores in FY22, which consequently led to a 57.88% YoY increase in net income to INR 35,373 crores, translating into an EPS of INR 39.64, which was a mere INR 0.31 in FY17. This is a massive 5-year CAGR of 164%. No other company in the index comes even close to this.
Hindalco Industries Limited
Hindalco Industries Ltd. (NS:) is the second-fastest growing company in the Nifty 50 list on the above-mentioned parameter. This miner has a market capitalization of INR 92,343 crores and trades at a P/E ratio of only 6.73, compared to the sector’s average of 13.34.
The company clocked a record profit of INR 13,730 crores in FY22, which is a mind-boggling 294% higher than last year’s profit of INR 3,483 crores and the EPS which stood at INR 8.89 in FY17 surged to INR 61.74 in FY22, depicting a 5-year CAGR of 47.36%. FIIs hold a significant stake of 24.76% in the company while mutual funds also own 13.15%. As I always mention, investors need to be extra vigilant in commodity-based businesses due to their cyclical nature.
JSW Steel Limited
JSW Steel Ltd (NS:) is engaged in the business of production and distribution of iron and steel products and has a market capitalization of INR 1,63,281 crores. The company also recorded a massive profit jump of 161.22% in FY22 to INR 20,665 crores on account of higher commodity prices. Over the last 5 years, the market share has also risen from 15.41% to 19.85%.
The increased profit bumped up the EPS to INR 68.51 in FY22, which was only INR 11.7 in FY17, depicting a 5-year CAGR of 42.4%. The icing on the cake is, the company is also trading at a dividend yield of a good 3.21%.
These 3 companies mentioned above are the only ones in the Nifty 50 index that have clocked a 5-year CAGR in EPS of over 40% and all 3 of them posted the highest-ever earnings in FY22.
