Fastest Growing Companies in India 2025

Select fast growing companies

Introduction

How to evaluate the fastest-growing companies in India? This article can shed some light on how to do it. We all want to buy a prospectative ‘growth stock’, but we often end up boying the wrang one. How to Eliminate This Miss? Read more About stocks with the highest last 10y returns,

List of Fastest Growing Companies in India

(Updated: 22-MAY-2025) Check the stock engine

Sl	Name	Price	Market Cap (CR)	OP. Rev. Growth	Net Profit Growth	Gmr score
1	Solarinds:[532725]	15,069.30	1,36,277.97	19.27	17.77	97.94
2	Piind:[523642]	3,657.30	55,643.22	27.36	20.57	97.77
3	Cholafin:[511243]	1,626.70	1,36,935.33	20.02	22.02	97.47
4	Gravita:[533282]	2,056.50	14,901.71	31.26	21.13	97.1
5	Ireda:[544026]	170.7	45,882.86	27.59	17.75	96.92

What I want to explain here is the concept of “fast growth”. Why Know The conceptBecause the way we search for fast-road companies is not a safe approach. Why do i say so? [For a broader perspective, check out our guide on Top Stocks to Buy in India.]

Because to Unearth a fast-road stock, we must look deeper. A superficial search will not not highlight a truly fast-road company. Then, how to go about it?

Suggeded reading, Self-Financeable Growth (SFG) Rate

The concept of growth – Look Deeper

Suppose I ask you this question, “Which are the potential fastest growing stocks in India in 2022”How you will answer this question? Our first instinctive reaction will be to look at the historical prices,

People who know more about stocks will see growth rates of Sales, Net Profit, EPS, Dividends, Net Worth, AssetsETC, and Make a Guess.

The question is, are these the right way?

The approach is not wrong, but a value investor would like to See DeeperSigns like sales growth, Profit growth, etc are only the tip of the iceberg.

What Lies Beneath is What’s Making these metrics grow,

How Does a Business Grow?

PAT, EPS, Dividend, and Net Worth of a Company Cannot Grow on Its Own. It must be grown. In order for the company to grow, it must take actionWhat are those actions?

• Reinvestment of retained profit: What are Retained ProfitsNet Profit Minus Dividend. It is that portion of network, which has not been paid to shareholders as dividends. Cumulative of all the passing years ‘Retained Profits are shown on the company’s balance sheet as “reserves’. Companies use their reserves to fund growth.
• Making Company More Efficient: Businesses Utilize Resources to Generate Profits. Companies that efficiently generate more profits per unit of resource utilized. Such Efficient Profit-Generating Companies Have a better chance to grow faster in the future.

So let’s sum up. How Does a Company Grow?

Company Growth = Growth Due to (Reinvestment + Efficiency Improvement)

A. How fast a company can grow?

Estimating future growth is like acting God. Why? Because future prediction is impossible.

Nobody can claim to know what will happen tomorrow. Neither Warren Buffett Nor You, Nor Anyone. But what can be done is this:

Estimate Future Growth Based on Business Fundamentals of a company.

What does it mean? Estimating Future Growth Based on Business Fundamentals is more Maths Than Fortunetelling. I am sure, you will agree that mathematics is more reliable.

But Maths will forecast high future growth only if the “business fundamentals” are good.

Which Fundamentals will ensure fast growth? Like growth is a factor of reinvestment & efficiency, Speed ​​of Growth Also has an interrelation. It has followed two interrelations:

1. How Much is Reinvested: Out of the total profit of the company, a portion of it is paid to shareholders as dividendsThe balance is retained by the company for reinvestment. The retained profits are recorded on the balance sheet as ReservesOut of these reserves, a portion is reinvested back into the company in form of Capex Plans. The objective of Capex is to make the company grow in size. The bigger will be the capex, the faster the company will grow. Capex Funding is Generally Done from Reserves Plus Debt.
2. How Well it is Reinvesp: Even if the company is reinvesting its reserves, important is to get the final results. What is the Final Result? Enhancement of Profit, and Profitability of the company. If either of these parameters is increasing, it is a sign that the reinvestment is being done by well by the company.

Generally, a fast-growing company reinvests most of its profit back into the business. The result is that its profit and profitability grow faster with time.

Which are the stock metrics which can tell us, how much is reinvested and how well it is reinvested? Please read further…

A1. How Much is Reinveased:

In order to undersrstand how much is gotting reinvested, one can use the below two metrics.

• Retention rate [(PAT-Dividend) / PAT ]: The Higher the Retention Ratio means the company is giving outwards and retaining more profit for reinvestment. For such companies, the “reserves” in the balance sheet grow faster.
• Reinvestment rate [(Net Capex+Change in WC) / {EBIT x (1-t)}]: How Much is Reinvested out of Reserve is more important. How to Know it? This can be known by calculating the reinvestment ratio.

Higher reserves also make additional funds available for the company. How?

As Reserves Go Up, The Company’s Equity Base Baces Richer. This brings down the company’s debt/equity ratio. Hence it becomes eligible for more loans. Why Loans?

• Long-term Debt: This will further increase the employed capital of the company. Companies can also use this extra fund to further boost their expansion and modernization plans.
• Short-term debt: This will also increase the company’s current assets. Companies can use this fund for their business operations (Working Capital etc.,

A company that has a high retention ratio gets double benefits. On one hand, it has more funds available for Capex. On other hand, it can also borrow more from banks (loans) and further boost its liquidity.

A2. How Well Profits are reinveleded:

The objective of reinvestment should not only be to increase revival and duty. It should also also enhance efficiency. If the efficiency is growing with profit, it is a sign that the company is handling bot priorities well. The priorities are, (1) the expansion of the size of operations, and (2) The modernization of the existing facility.

How to know if the efficiency is increases or not? By looking at roe and Roce history.

• Roe (PAT / Book Value).
• Roce [ EBIT / (Total Asset – Current Liability).

[Read more on how to calculate ROE – Example.]

A3. Formula#1 for speed of growth

A combination of Retention Ratio, Reinvestment Ratio, ROE, and ROCE will answer how fast the company will grow in the future. A combination of the two formulas, shown beLow, will tell us about the speed of a company.

What do the Above Formulas Signify? To grow, a company reinvests its profits back into the business. This reinvested money ensured future growth. How fast will be the growth?

There are two ways to look at it. (a) A General observation – Through Retention Ratio and Roe. (b) More Specific observation – through reinvestment ratio and roc.

• Retention ratio * roe: Talks about how much a company adds to its equity to generate extra rights.
• Reinvestment Ratio * Roc: Talks about how much a company adds to its assets to generate extra profits.

One can use either of the Above Formulae to Estimate the Growth Rate of the company due to reinvestment.

Abbreviations used:

• PAT = Profit after tax.
• Capex = capital experture.
• WC = Working capital,
• Ebit = Profit Before Interest & Tax.
• t = effective tax rate.
• Roe = return on equity.
• Roc = Return on capital,

A4. Formula#2 for speed of growth

Suppose there is a company whose Total Employed Capital is Say Rs.100 Crore. This company generates ebit of Rs.10 Crore. What is it Roce? 10% (Ebit/Capital Employed).

Now, this company has a target to improve its ROCE from 10% to 12%. But it does not intend to grow through the “reinvestment” route. What it can do to improve Roce? By cutting down on its cost. This way companies’ ebit will go up.

But this growth in ebit has been happy with adding to its Asset Base (Zero Capital Expenditure).

Here we can say that the company has been able to increase profit By improvement its efficiencyIdeally, this is the best way to ensure growth. But such growth has Two Major Limitations,

Beyond That, Growth Can only Happen from Reinvestment (By Asset Enhancement). What is the formula that can be used to quantify growth due to efficiency improvement?

Growth in the company due to efficiency improvement =

So this brings us to our final conclusion. The Total Growth of a Company Can Happen in Two Ways (Both Included).

• By reinvestment of its profit back into the business.
• By Efficiency Improvement.

This way the total growth formula comes out to be like this:

Example of Future Growth Rate Estimation

How one can estimate the future growth rate of a company? We can use the below two steps:

• Step #1. Pull out the numbers: Whoch Numbers are to be obtained from the company’s financial reports? We need to pull out specific data from companies’ “Profit and Loss A/C” and from the “Balance Sheet”. The numbers that I am talking about are these:

• Step #2. Calculate: The sample calculation is shown in the below image. [P.Note: In rows “ab” & “ac” which is Efficiency Growth (ROE/ROC), will be zero if the preceding year’s ROE/ROC is more than 0.20. Why? Because, I have assumed that a company that already has a high ROE/ROC, cannot grow more on basis of efficiency improvement. Such companies must reinvest for future growth. The total growth of such companies will be a factor of reinvestment.

In the above example, we have two total growth numbers: (a) Total Growth (ROE based), and (b) Total Growth (ROC based).

Which one is to be referred to? Frankly speaking, there are no preferences. The selection is totally based on the researcher’s judgment. I generally prefer ROC-based total growth calculation. Why? Because it is based on “net capital expenditure and change in working capital”.

What shall be the growth rate for the above example stock? For me, a safe assumption for the future growth rate will be 7.5%. Why? The rationale behind this decision is shown below:

Conclusion

Let’s conclude the topic of “companies growth”. Using ROC Formula, the growth rate of a company is represented as:

Total Growth = Reinvestment Ratio * ROC + (ROC2 – ROC1) / ROC1

• Case-1: Company is not reinvesting: If the company is not reinvesting its capital, CAPEX + Change in working capital is zero. This means, its reinvestment ratio is zero. In this case, growth is totally dependent on efficiency improvement. Growth = (ROC2 – ROC1) / ROC1
• Case-2: Company is only reinvesting: If the company is only reinvesting, its growth due to efficiency improvement will be zero. In this case, growth is totally dependent on reinvestment. Growth = Reinvestment Ratio * ROC

What we can conclude from this article?

Companies which reinvest its money, and also has higher ROE / ROC is more likely to grow faster in future.

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