The market has climbed by 3.4% over the past week, with every sector up and the Financials sector leading the way. In the last year, the market has climbed 44%, and earnings are forecast to grow by 17% annually. In this thriving environment, growth companies with high insider ownership can offer compelling opportunities due to their potential for robust performance driven by strong internal confidence and alignment of interests.
Top 10 Growth Companies With High Insider Ownership In India
Overview: AU Small Finance Bank Limited provides a range of banking and financial services in India, with a market cap of ?470.79 billion.
Operations: AU Small Finance Bank generates revenue from several segments, including Treasury (?18.63 billion), Retail Banking (?103.26 billion), Wholesale Banking (?12.74 billion), and Other Banking Operations (?3.78 billion).
Insider Ownership: 24.3%
Earnings Growth Forecast: 24.2% p.a.
AU Small Finance Bank demonstrates strong growth potential with forecasted annual earnings and revenue growth of 24.16% and 24.2%, respectively, outpacing the Indian market averages. Despite recent management changes, including the resignation of its Head of Human Resources, the bank reported robust Q1 2024 earnings with net income rising to ?5.03 billion from ?3.87 billion a year ago. The bank's P/E ratio (28.5x) is below the Indian market average, indicating potential value for investors despite past shareholder dilution concerns.
Overview: Indoco Remedies Limited manufactures, markets, and sells formulations and active pharmaceutical ingredients in India and internationally, with a market cap of ?33.26 billion.
Operations: The company's revenue primarily comes from its Pharmaceuticals segment, which generated ?18.22 billion.
Insider Ownership: 22%
Earnings Growth Forecast: 43.7% p.a.
Indoco Remedies, a growth company with high insider ownership, expects significant earnings growth of 43.75% annually over the next three years, outpacing the Indian market's 16.9%. Despite recent regulatory challenges and lower profit margins (4.2% vs. 7.6% last year), insiders have substantially increased their holdings in the past three months. The company's revenue is forecast to grow at 10.4% per year, slightly above the market average but below high-growth benchmarks.
Overview: Varun Beverages Limited, with a market cap of ?2.07 trillion, operates as the franchisee for PepsiCo's carbonated soft drinks and non-carbonated beverages through its subsidiaries.
Operations: The company's revenue segment primarily consists of the manufacturing and sale of beverages, generating ?180.52 billion.
Insider Ownership: 36.3%
Earnings Growth Forecast: 22.3% p.a.
Varun Beverages, with substantial insider ownership, is positioned for significant growth. Its earnings grew 29% last year and are forecast to grow 22.27% annually over the next three years, outpacing the Indian market's 16.9%. Despite a high level of debt, Varun Beverages reported strong financial results for Q2 2024 with revenue of ?73.78 billion and net income of ?12.53 billion. Recent changes include an interim dividend and amendments to its Memorandum of Association.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.The analysis only considers stock directly held by insiders. It does not include indirectly owned stock through other vehicles such as corporate and/or trust entities. All forecast revenue and earnings growth rates quoted are in terms of annualised (per annum) growth rates over 1-3 years.
Companies discussed in this article include NSEI:AUBANK NSEI:INDOCO and NSEI:VBL.
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