Small capsules of growth

Mark Mobius, executive chairman of Templeton Asset Management’s Emerging Market group is betting on smaller Indian companies to profit from expansion in this fast growing economy. This smart move by him has caught our attention. On this note we have analysed last one year’s performance of BSE small cap companies and picked out top 5 stocks according to their sales, operating profit and net profit growth numbers.


Our Top Five performers are Ashiana Housing Ltd, Suntek Realty Ltd, 8K Miles Software Services, Ajmera Realty & Infra India and Cigniti Technologies. Among 332 BSE Small Cap Companies 133 companies have posted more than 1 per cent sales growth with average sales growth of 20 per cent. Out of 133 growth companies, 89 small cap’s have recorded net profit growth of more than 1 per cent. 

Our Top Notch performer, Ashiana Housing has reported an over two-fold jump in net profit to Rs 129.39 crore for the last fiscal on higher sales. Company’s area under construction has increased to 23.4 lakh sq.ft (FY16) vs 22.8 lakh sq. ft. (FY15). 

Suntek Realty’s sales have surged to Rs 784.86 crore (FY16) vs Rs 302.84 crore (FY15) due to the success of BKP project and the launch of a new project at Gurgaon. 

NexAge acquisition phenomenon has increased the customer base and adoption of cloud platform by different companies has lifted 8K Miles’ sales numbers in FY16. Company has reported a 109 per cent annual growth in its net profit to Rs 11.27 crore, compared to Rs 5.4 crore in the year-ago period as more and more companies have adopted its cloud platform.
 
Our fourth performer is Ajmera Realty & Infra India Ltd. Company  is focusing on developing 10,000 affordable homes in the next 10 years in Mumbai Metropolitan region (MMR). In FY16, ARII posted 62 per cent rise in sales numbers. 

At 5th position stands a leading provider of independent software testing services - Cigniti Technologies Ltd, which also posted double digit growth numbers in sales, operating profit and net profit. Company serves 48 verticals with current client list of 192 clients on its platter.

Looking at the last one-year’s Price Index graph of these top five companies, we have observed that 8K Miles has given over 243 per cent returns over a span of one year, backed by strong financial numbers. Secondly Cogniti Technologies has rewarded investors with 125 per cent returns. Other three companies were not able to give plentiful returns, in spite of hovering growth numbers.