Hi, No business can enjoy uninterrupted rapid growth without any difficulties.
But, opportunities arise from these challenges only.
Despite of the volatile economic and market cycles, many Indian companies have maintained their growth over the years.
We would like to know about those companies that are rapidly gaining market share in their respective sectors.
So, in today's video, we bring you 5 companies from 5 different sectors that have the fastest revenue growth in their industry in the last 5 years.
If a company is growing its revenue faster than its industry peers, it can be considered that the company is gaining market share in its industry.
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Now let's come back to our topic.
Today we will talk about BFSI i.e. Banking, Financial Services and Insurance, IT, FMCG, Auto, and Pharma sectors,
and we will see which is the fastest growing company in these sectors.
We have selected those companies whose market cap is more than ₹ 5000 crores.
The company that has the highest 5-year sales growth CAGR in its industry will be covered last.
Note for this video, we have considered the market closing prices of August 19, 2022.
So, let's start today's video.
In Pharma Sector, we are going to cover Caplin Point Laboratories Ltd.
Caplin Point Laboratories is primarily involved in the manufacturing and sourcing of APIs and finished formulations.
At the same time, the company is also engaged in R&D and clinical research.
Presently, the company has a wide product portfolio comprising 4000+ pharma products and 650+ formulations.
The company sales have grown by 25.88% CAGR in the last 5 years.
Caplin's Capex journey has begun where it is expanding its existing capacities and is in the process of doing backward integration as well.
After expanding its product portfolio through this CAPEX, the company intends to enter several regulated markets such as
Canada, Australia, China, and Russia, countries.
But if we talk about the 2 important profitability ratios – Return on Equity (ROE) and Return on Capital (ROCE)
then these numbers of the company have been on a decline in the last few financial years.
ROE means Return on Equity, that is, how much profit the company can generate in comparison to the shareholders' shares or investments.
Higher the ROE value, more efficient the management of a company is at generating profits by utilizing the invested capital of its shareholders.
ROCE is a financial ratio that tells you how efficiently a company is using its capital and the returns it is generating from it.
To calculate this, we divide EBIT (Earnings Before Interest and Tax) by the total capital employed.
Let's now look at some of the company's key financial and technical ratios.
Zydus Wellness Limited is the fastest-growing company in the FMCG sector.
Zydus Wellness operates as an integrated consumer business that captures the entire value chain of
development, production, marketing, and distribution of health and wellness products.
Their product portfolio comprises well-known brands such as Glucon-D, Sugarfree, Everyouth, Nutralite, Complan, Nycil, Heinz, etc.
The company has a 5-year sales growth CAGR of 36.08%.
The existing brands in the company's product portfolio are growing rapidly
and recently their Glucon-D brand has crossed the milestone of 60% market share.
Also, the company's direct distribution reach has expanded very rapidly in the last 3-4 years and is expected to grow well in the future.
However, after the economy reopened, the company's Sugarfree brand's revenue growth slowed slightly in the last three quarters,
mainly due to a major reason for their less spending on health and hygiene products.
Complan also delivered a relatively soft quarter, probably due to the category slowdown and price cuts by the category leader.
Due to this, Zydus Wellness has lost 0.7% of its market share in a year. (5.5% in FY21 vs 4.8% in FY22).
The company is taking a lot of steps to make recovery gains in these two segments, which can be a monitoring point going forward.
As you can see on your screen, we have shown some key financial and technical ratios of this company.
Tanla Platforms Limited is the fastest growing company in the IT sector.
Tanla Platforms is a cloud communications provider that connects businesses with customers.
This company holds a 70% market share of India's automated SMS traffic through its platform Trubloq.
Tanla Platforms has a 5-year sales growth CAGR of 40.80%.
One of the strengths of the company is its tech platform structure, which in turn gives a good economy of scale with increasing revenue.
This means that the company does not have to invest time and again and through a fixed investment, they can scale their revenue.
Because of it, we can see a good improvement in its margin.
Their 3-year sales CAGR is 47% but their 3-year PAT CAGR is 182%, which means their profit margins are growing rapidly.
One of the major weaknesses of the company is its over-dependence on the SMS medium.
In the last 3 years, 96-97% of revenue came from messaging services for Tanla.
If there is a disruption in the SMS segment or some other medium replaces SMS for business-to-customer communications,
it could have a negative impact on Tanla's business.
As you can see on your screen, we have shown some key financial and technical ratios of this company.
In Auto Sector we are going to cover Olectra Greentech Ltd.
Olectra Greentech is engaged in the manufacturing of composite polymer insulators and Electrical Buses.
The company sales grew by 41.42% CAGR in the last 5 years.
One of the strengths of the company is the technical support they get from BYD China for the electric bus division.
Olectra Greentech has a technological collaboration with BYD China for the purchase of electric bus batteries, chassis, components, sub-assemblies, and spare parts.
BYD has the largest fleet of 100% electric buses in the world.
Also, it is an experienced player in the manufacturing of Composite Polymers as proved by its healthy order book in this segment
and strong client base like Powergrid Corporation, L&T, and Kalpataru Power Transmission Ltd.
But, one thing that investors should keep in mind is the high working capital intensive operations of Olectra Greentech Ltd.
its primary reason is its high debtor days which is because of the delay in receiving payments from its customers.
Along with that, due to the increasing competition from e-bus, their profits can be impacted in the coming time.
Let's now look at some of this company's key financial and technical ratios.
And finally the fastest growing company in BFSI is Aptus Value Housing Finance India Limited.
Aptus Value Housing Finance India is a home loan company.
Aptus is primarily engaged in meeting the housing finance needs of self-employed, low and middle-income families in semi-urban and rural areas.
The company mostly targets first-time home buyers.
The company sales have grown by 45.19% CAGR in the last 5 years.
A major strength of Aptus is its in-house team involved in business sourcing, recovery, collection, and technical and legal works.
The company follows a hub and spoke model where each hub has the availability of expertise of its technical and legal team.
Aptus also has a centralized credit appraisal and monitoring system.
The company's customer acquisition process is very robust due to which the company's asset quality has been relatively good.
however, the exposure of Aptus to the under-banked segment of borrowers could prove to be a challenge.
Aptus caters to self-employed customers in the informal low and middle-income group that other banks and NBFCs do not cater to.
And this segment is most affected by the economic slowdown.
Hence, maintaining the asset quality along with scaling its operations may become a challenge for the company.
As you can see on your screen, we have shown some key financial and technical ratios of this company.
So these were a few companies that are continuously gaining market share in their respective sectors.
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