To clear out the noise, we looked at companies with a market cap above ₹5,000 crore that have recorded the highest compound annual growth in revenue over the past seven years.
The results will surprise you.
But before we share the names, another caveat is in order: we excluded all recently listed companies and pure holding companies from this list. What remains are companies that you should definitely track.
#1 Refex Industries
With a seven-year revenue CAGR of 67.29%, Refex Industries tops our list of the fastest-growing companies by revenue. This revenue growth is also reflected in its stock price, which surged from ₹4.4 in 2018 to ₹576 in September 2024, at a CAGR of 100%. Today it is a mid-cap company with a market cap of ₹6,926 crore.
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Refex Industries was founded in 2002 as a refrigerant gas refilling company supplying hydrofluorocarbons (HFCs) for air-conditioning and commercial and industrial refrigeration. Its clients include Voltas and Cars24.
However, Refex found its revenue growth driver when it entered the ash and coal handling business in 2018. It procures coal for thermal power plants run by NTPC, Adani and Hindalco, so its business is affected by coal prices. The company also collects, transports, and disposes of ash sustainably, by repurposing it for the construction of roads, highways and embankments. In six years, disposing of coal and ash became Refex’s primary business, accounting for 68% of its revenue.
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The company also entered power trading business in 2022 and saw a 50% year-over-year jump in revenue in FY24.
The tremendous jump in sales from these two businesses boosted the company’s consolidated profit to ₹93 crore in FY24 from ₹1 crore in FY18. The operating margin grew from 2% to 11% between FY18 and FY21, and the company has sustained this margin since then. Sustainable profits encouraged the company to declare its first dividend in FY21.
Refex currently trades at a price-to-sales (PS) ratio of 4.34 and a price-to-earnings (PE) ratio of 64.5, well above its 10-year median PE ratio of 10.7. However, this high ratio is probably justified by its profit CAGR of 24.1% in the past five years.
The company Industries continues to see demand for its coal and ash handling business thanks to governmentmandates for proper ash disposal and adherence to environmental standards. It is also venturing into more sustainable services such as green mobility for companies such as TCS and BNP Paribas.
#2 Jupiter Wagons
You may have heard about this company because of the orders it’s won from Indian Railways and the defence sector. The mobility engineering company is second on our list with a seven-year revenue CAGR of 65.89%. Its stock price has surged from ₹20in 2018 to ₹519 in September 2024, at a CAGR of 59%, driving its market cap to ₹22,000 crore.
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Jupiter Wagons was founded in 1979 as a manufacturer of freight wagons for railways. Over the years it adapted its technology and expanded its product offerings across rail, road and marine transportation. It started making wagons for passenger trains, specialised load bodies for commercial vehicles (CV), advanced braking systems, and containers. It is a key beneficiary of the government’s accelerated investments in logistics, especially rail infrastructure.
In FY24 the company reported its highest-ever revenue (up 76% to ₹3,641 crore), Ebitda (up 93% to ₹491 crore), and net profit (up 165% to ₹333 crore). Revenue growth was driven by a 91% surge in the railway wagons business, which accounts for 85% of revenue. The company focused on improving its manufacturing and cost efficiency, which helped increase its operating margin from 0% in FY18 to 13.5% in FY24. The company paid its first dividend in 10 years in FY13.
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Jupiter Wagons has an order book of ₹7,102 crore and has increased new clients by 40%. Its private sector clients include Tata Motors, Mahindra & Mahindra, and Reliance in commercial vehicles, and Adani and GE in containers.
Jupiter Wagons’s stock is trading at a PS ratio of 5.82 and a PE ratio of 61.45, which is much higher than its 10-year median PE of 28.9. Its peer Titagarh Rail Systems is trading at a slightly lower PS ratio (4.3) and PE ratio (55.5), but Titagarh’s five-year revenue CAGR is 19.83%, much lower than Jupiter’s 75.97%, which probably justifies the latter’s high valuation.
Jupiter Wagons is looking to increase its wagon manufacturing capacity from 700 to 1,000 a month. It is also expanding its product portfolio through acquisitions. In FY24 it acquired Stone India to make air brake systems for railways. It also acquired Bonatrans India to manufacture wheelsets.
Jupiter Wagons has also entered the electric light commercial vehicle market with Jupiter Electric Mobility, as well as commercial drones and battery energy storage systems. The company has secured an equity investment of around ₹403 crore from institutional buyers to fund these projects.
A strong order book, government and private investment in logistics, and new products could keep the revenue growth momentum strong in the coming years.
#3 Magellanic Cloud
Coming in third is IT firm Magellanic Cloud, with a seven-year revenue CAGR of 61.37%. Through acquisitions, the company has ventured from cloud, IT services and human capital into new avenues such as e-security and drones. This has helped the company grow its revenue from ₹20 crore in FY17 to ₹560 crore in FY24, and increase profits at a CAGR of 94% – faster than revenue – over this period.
The surge in revenue and profit drove Magellanic Cloud’s stock from ₹2.5 in 2018 to ₹106 in September 2024, at a CAGR of 66%. Note that this stock is only listed on BSE and has a market cap of ₹6,186 crore.
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Incorporated in December 1981 as South India Projects Limited, the company changed its name to Magellanic Cloud in 2018. It has several businesses, all linked to digital transformation solutions, and has been acquiring technology companies to strengthen its service offerings.
In May 2022 it acquired Ivis International & Provigil Surveillance to offer electronic surveillance and security services. Today it offers e-surveillance at ATMs, bank branches, and at non-banking financial corporations (NBFCs). This acquisition helped Magellanic Cloud achieve a fivefold growth in production capacity, from 30 units to 150 a day. Cost optimisation, technology improvements and strategic vendor negotiations have helped it reduce operating expenses by 20%, boosting its operating margin to 33% in FY24 from 5% in FY17.
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In March 2023 Magellanic acquired a 70% stake in Scandron to enter the drone business. In February 2024 it received a licence from the Directorate General of Civil Aviation (DGCA) for cargo and logistic Drones, opening new avenues. Scandron received its first major logistics drone order worth ₹43 crore from an Indian robotics firm. The addition of these new income streams pushed FY24 revenue up 31% year-over-year to ₹560 crore.
The stock is currently trading at a PS ratio of 10.8 and a PE ratio of 54.67, which is above the IT sector’s median PE ratio of 38.67. The high PE is probably justified as its five-year profit CAGR of 67.2% is well above the sector’s 19.28%.
The company expects revenue to grow 25-30% in FY25. It anticipates a big drone order from the defence sector, which could increase this to 50%. It is also looking for acquisitions in the IT sector, e-surveillance and drone technology that could help it enter the Middle East market.
#4 Lloyds Enterprises
The fourth stock in our list is iron and steel trader Lloyds Enterprises, which clocked a seven-year revenue CAGR of 54%. A majority of this came in the past two years. Revenue surged 152% year-on-year to ₹958 crore in FY24 and 692% year-on-year FY23. It also reported operating margins of 8%, 13%, and 9% in the past three years and paid dividends in all three years. Before FY22, it operated at a loss for seven years.
These improvements in fundamentals drove the stock from ₹4.4 in September 2022 to 49.44 in September 2024, giving the company a market cap of ₹6,289 crore.
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Incorporated in 1986 as Shree Global Tradefin, the company was rebranded as Lloyds Enterprises in September 2023. Primarily involved in iron and steel trading, it also ventures in real estate, metals and mining, luxury grooming, restaurants, and engineering.
Lloyds Enterprises expanded its trading portfolio among various products in the steel sector, which increased its trading income by 368% year-on-year to ₹316 crore in FY24. It increased its investments in real estate with the acquisition of Aristo Realty in January 2024. It also has indirect holdings in Lloyds Metals and Energyand Lloyds Engineering Works, which develops heavy machinery for the hydrocarbon sector, oil and gas, steel plants, power plants, nuclear plant boilers, and comprehensive turnkey projects.
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The stock is currently trading at a PS ratio 5.56 and a PE ratio of 54.35. It is strongly influenced by macroeconomic factors, which makes it a cyclical stock. This means the 10-year median PE ratio may not be the right measure to use. Tread with caution as the stock is trading at a high valuation.
#5 Adani Green
The last stock in our list is Adani Green, with a seven-year revenue CAGR of 51.57%. A part of the Adani Group, Adani Green is India’s largest renewable energy company. Incorporated in 2015, it started trading on the stock exchange in June 2018. The company grew its green power generation capacity to 10.9 GW in FY24, at a five-year CAGR of 41%.
Adani Green’s revenue increased to ₹9,220 crore in FY24 from ₹502 crore in FY17. It has been operating at a margin of 57-79% and started reporting net profit in FY20. Since then, the companyhas grown its net profit at a CAGR of 62% but has not declared any dividends. The revenue and profit numbers drove the company’s stock price at a CAGR of 81% over this period, giving it a market cap of ₹3 trillion.
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Adani Green expects to build a 50 GW renewable energy portfolio by 2030 and maintain an Ebitda margin of 92%. It plans to fund this portfolio with debt and equity. While the company has strong growth prospects, the stock is trading at a PS ratio of 30.5 and a PE ratio of 223.8. This is lower than its six-year median of 553.3x but well above the power generation and supply industry’s median PE of 36.65. Tread with caution.
The bottom line
Four of the five fastest-growing companies by revenue in the past seven years have turned from small cap to mid cap firms. While they offer significant growth potential, their valuations seem to have factored in quite a bit of this growth already. For their stocks to continue doing well, they will have to exceed expectations and not merely match them.
Whether they can do that is anybody’s guess, but you should consider adding them to your watch list to find out.
Fore more such analysis, read Profit Pulse.
Note: We have relied on data from Screener.in throughout this article. Only in cases where the data was not available, have we used an alternate but widely used and accepted source of information.
The purpose of this article is only to share interesting charts, data points and thought-provoking opinions. It is NOT a recommendation. If you wish to consider an investment, you are strongly advised to consult your advisor. This article is strictly for educational purposes only.
Puja Tayal is a seasoned financial writer with more than 17 years of experience in fundamental research. She brings a good blend of comprehensive, well-researched insights into a company’s work in her articles.
Disclosure: The writer and his dependants do not hold the stocks/commodities/cryptos/any other asset discussed in this article.
