High CAGR Stocks in Nifty 500

Last Updated on Oct 24, 2024 by Vanessa Sequeira

In the world of investing, understanding growth metrics is crucial to identifying potential winners in the stock market. One of the most essential metrics to assess the long-term performance of a stock is the Compound Annual Growth Rate (CAGR). Investors often seek stocks that have delivered high CAGR over the years, as these stocks often signify consistent growth and stability. This article delves into the importance of CAGR, how to calculate it, and how to spot high CAGR stocks in India with Tickertape Stock Screener.

Table of Contents

Best Largecap CAGR Stocks

Name	Sub-Sector	Market Cap (Rs. in cr.)	Close Price (Rs.)	PE Ratio	5Y CAGR (%)	5Y Avg Net Profit Margin (%)
Reliance Industries Ltd	Oil & Gas – Refining & Marketing	18,35,603.57	2,738.40	26.37	16.32	7.95
Tata Consultancy Services Ltd	IT Services & Consulting	14,86,672.16	4,079.85	32.38	14.67	19.22
HDFC Bank Ltd	Private Banks	12,76,741.66	1,728.70	19.93	7.06	19.96
Bharti Airtel Ltd	Telecom Services	10,18,735.88	1,692.55	136.43	35.07	-6.94
ICICI Bank Ltd	Private Banks	8,67,675.85	1,259.05	19.61	23.52	14.15
Infosys Ltd	IT Services & Consulting	8,15,167.40	1,852.75	31.07	19.26	17.42
State Bank of India	Public Banks	7,23,831.31	813.95	10.79	24.73	8.58
Hindustan Unilever Ltd	FMCG – Household Products	6,43,470.81	2,693.55	62.61	5.04	16.62
ITC Ltd	FMCG – Tobacco	6,11,496.50	483.65	29.89	14.43	26.64
Life Insurance Corporation Of India	Insurance	5,90,185.54	926.30	14.42		2.14

Note: The list of best CAGR stocks is derived from Tickertape Stock Screener as of 21st October 2024 and filtered using the following parameters

Stock universe – Nifty 500
Market Cap – Large cap
5Y CAGR – High
5Y Avg Net Profit Margin – High

Best Midcap CAGR Stocks

Name	Sub-Sector	Market Cap (Rs. in cr.)	Close Price (Rs.)	PE Ratio	5Y CAGR (%)	5Y Avg Net Profit Margin (%)
HDFC Asset Management Company Ltd	Asset Management	1,01,011.68	4,602.95	52.00	9.81
ICICI Lombard General Insurance Company Ltd	Insurance	1,00,952.72	2,024.35	52.62	10.23	9.60
Apollo Hospitals Enterprise Ltd	Hospitals & Diagnostic Centres	1,00,495.41	6,986.40	111.84	35.89	4.40
Oracle Financial Services Software Ltd	Software Services	99,777.18	11,196.50	44.96	29.53	32.49
Suzlon Energy Ltd	Renewable Energy Equipment & Services	99,623.83	70.63	150.87	97.51	-9.16
Lupin Ltd	Pharmaceuticals	99,270.47	2,151.95	51.85	23.83	1.83
Indian Hotels Company Ltd	Hotels, Resorts & Cruise Lines	97,832.50	679.00	77.70	36.20	-0.61
Jindal Steel And Power Ltd	Iron & Steel	94,095.49	948.95	15.85	54.54	7.78
Torrent Power Ltd	Power Transmission & Distribution	93,230.04	1,967.05	50.86	47.22	7.37
Canara Bank Ltd	Public Banks	92,974.18	102.86	6.09	22.19	5.49

Note: The list of best CAGR stocks is derived from Tickertape Stock Screener as of 21st October 2024 and filtered using the following parameters

Stock universe – Nifty 500
Market Cap – Mid cap
5Y CAGR – High
5Y Avg Net Profit Margin – High

Best Smallcap CAGR Stocks

Name	Sub-Sector	Market Cap (Rs. in cr.)	Close Price (Rs.)	PE Ratio	5Y CAGR (%)	5Y Avg Net Profit Margin (%)
Central Depository Services (India) Ltd	Stock Exchanges & Ratings	32,290.50	1,551.90	77.04	71.53	45.87
Multi Commodity Exchange of India Ltd	Stock Exchanges & Ratings	32,279.77	6,629.00	388.40	44.05	32.45
Vedant Fashions Ltd	Textiles	32,215.72	1,316.15	77.78		26.93
Apollo Tyres Ltd	Tires & Rubber	32,024.97	510.30	18.60	22.36	3.79
KPR Mill Ltd	Textiles	32,017.72	922.25	39.76	50.09	13.76
Suven Pharmaceuticals Ltd	Pharmaceuticals	31,819.35	1,276.80	105.97		31.34
Aditya Birla Real Estate Ltd	Textiles	31,542.58	3,030.50	624.23	49.93	4.27
Brigade Enterprises Ltd	Real Estate	31,324.22	1,259.90	69.36	44.80	4.45
Emami Ltd	FMCG – Personal Products	31,209.75	694.25	43.14	14.61	18.09
Himadri Speciality Chemical Ltd	Commodity Chemicals	30,769.59	611.65	74.91	51.95	6.09

Note: The list of best CAGR stocks is derived from Tickertape Stock Screener as of 21st October 2024 and filtered using the following parameters

Stock universe – Nifty 500
Market Cap – Small cap
5Y CAGR – High
5Y Avg Net Profit Margin – High

Understanding the 5-Year CAGR

CAGR (Compound Annual Growth Rate) is a widely used metric to measure a stock’s return over a specific period. In simple terms, CAGR is the average annual growth rate of an investment over a given time frame. Investors use the 5-year CAGR to understand how a stock has grown year-on-year over the last five years.

For example, if you invested ₹1,00,000 in a stock five years ago and today that investment is worth ₹2,50,000, the 5-year CAGR would help you understand the annual growth rate of that investment, even if the growth wasn’t linear.

For example, the highest CAGR stocks in the last 10 years in India, like Tata Elxsi and Divi’s Laboratories, have consistently displayed high CAGR. When investors analyse stock CAGR returns, they can better understand long-term performance, smoothing out annual volatility.

How to Calculate 5Y CAGR

The formula for calculating the 5-year CAGR is:

CAGR=(Final ValueInitial Value)15−1CAGR = \left( \frac{Final\ Value}{Initial\ Value} \right)^{\frac{1}{5}} – 1CAGR=(Initial ValueFinal Value)51−1

Here’s how it works:

Initial Value: The stock price five years ago or your initial investment.
Final Value: The stock price today or the current value of your investment.
5: The number of years over which you’re calculating the CAGR.

For example, if the stock price of a company was ₹500 five years ago, and today it is ₹1,500, the CAGR would be:

CAGR=(1500500)15−1≈0.245 or 24.5%CAGR = \left( \frac{1500}{500} \right)^{\frac{1}{5}} – 1 \approx 0.245 \text{ or } 24.5\%CAGR=(5001500)51−1≈0.245 or 24.5%

This means the stock grew at an average of 24.5% per year over the last five years.

How to Identify High CAGR Stocks

Identifying high CAGR shares requires careful analysis and screening. Some tools, like a CAGR stock screener, can help identify stocks that have performed well over a specific period.

To spot top CAGR stocks in India, particularly in the Nifty 500, focus on:

Historical Performance: Look at how the stock has performed in the last 5, 10, or 20 years. Stocks with the highest CAGR in the last 10 years in India or the highest CAGR stocks in the last 20 years in India often show consistent growth.
Sector Trends: Some sectors naturally have higher growth rates due to favourable industry conditions. Stocks in these sectors are more likely to be high CAGR stocks.
Financial Health: Ensure the company has a strong balance sheet with increasing revenue and profits, low debt, and efficient management.

Using these strategies, you can find some of the top CAGR stocks in the last 10 years against a market index that may continue to perform well in the future.

Which Sectors in India Reflect High CAGR?

Certain sectors in India have exhibited high CAGR over the last decade due to the country’s economic growth, technological advancements, and favourable policy changes. Here are a few sectors where investors have seen high CAGR shares:

Technology and IT Services: The technology sector, including IT services, software, and digital transformation companies, has consistently delivered some of the highest CAGR stocks in India. IT stocks like TCS and Infosys have shown steady growth over the years, making them attractive for long-term investors.
Pharmaceuticals and Healthcare: India’s pharmaceutical industry has been booming, driven by increasing healthcare demand, exports, and innovation. Several high CAGR large-cap stocks and high mid cap stocks in this sector have performed exceptionally well over the years.
Consumer Goods and FMCG: Fast-moving consumer goods (FMCG) companies have shown consistent growth, with many top CAGR stocks in India coming from this sector. The sector’s resilience and steady demand make FMCG stocks a favourite among investors.
Banking and Financial Services: The financial services sector, particularly private banks and NBFCs, has seen robust growth. These companies often feature among the best CAGR stocks due to their ability to expand operations and increase profitability.
Renewable Energy and Infrastructure: With the government’s push towards green energy and infrastructure development, stocks in this space are emerging as future high-growth players. These could potentially be among the best CAGR stocks for the next 10 years.

Conclusion

Investing in high CAGR stocks in the Nifty 500 can be a smart strategy for long-term wealth creation. While stocks with more than 50% CAGR are rare, identifying companies with consistent growth over time can result in substantial returns. Using CAGR as a tool, investors can streamline their research and focus on companies with a track record of delivering strong returns. With the right analysis, it’s possible to identify the best CAGR stocks in the last 10 years. Whether you’re looking at high CAGR large cap stocks or high CAGR small cap stocks, conducting thorough research will help you make informed investment decisions. Moreover, you can assess high CAGR companies in India using over 200 filters with Tickertape Stock Screener to make a data-backed decision.

FAQs

What is CAGR in stocks?

CAGR, or Compound Annual Growth Rate, measures an investment’s average annual growth rate over a specific period. In stocks, it helps assess how much a stock’s price or an investment has grown year-on-year, providing a clearer picture of long-term performance.

Which sector has the highest CAGR in India?

The technology, pharmaceutical, and financial sectors have consistently shown some of the highest CAGRs in India over the last few decades. These sectors are driven by innovation, global demand, and expanding consumer bases, making them attractive to long-term investors.

What is a good CAGR ratio?

A “good” CAGR can vary depending on market conditions and investor expectations. Generally, a CAGR of 15% or more over five years is considered excellent. However, even a 10-12% CAGR can be very strong, especially in large-cap stocks that offer stability and steady growth.

How to identify the highest cagr stocks in the last 3 years?

To identify the highest CAGR stocks over the last 3 years, start by reviewing historical stock price data and calculating the CAGR using the formula:

[(Ending Value/Beginning Value)^(1/3)] – 1

You can use Tickertape Stock Screener, which provides ready-made CAGR data for easy analysis.

Author
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Harshit Singh

Content Strategist at Tickertape

Hey there, I’m Harshit Singh Mahey! With eight years of experience as a Content Strategist, I’ve had the pleasure of working with a Fortune 100 company and building three successful startups from the ground up.

As an investment fanatic, I’ve dabbled in early-stage startups, mutual funds, gold, stocks, smallcases, and real estate to identify which assets generate the highest ROI. At Tickertape, I’m dedicated to presenting my learning and providing insightful suggestions to help my readers make sound investment decision.