High Return Stocks (It is 1-Year Performance)
In the previous year some Indian companies gave out staggering returns:
Ujaas Energy Ltd: The company has a 6,430% return whose drivers were a 165% growth in the quarterly profitability and good standing in renewable energy.
Eraaya Lifespace Ltd: ~5,642% return, as the company boasts of a staggering profit of some 1,800 plus percentage growth in its quarterly earnings.
Dolphin Offshore Enterprises: -Return of ~4,909% is negative ROCE, yet the quarterly profits increased by approximately 948.
Kesar India Ltd: Approx. 2531 return with high ROCE ( 39 ) and ROE ( 42 ).
Technvision Ventures Ltd: +1,905% at an ROCE of approximately +98% and ROE of approximately +324 percent.
Marsons Ltd, Tinna Trade Ltd, TCC Concept Ltd: Payoffs between approximately 1,300% and 1,500% supported by robust increase in profitability and productivity.
High Profit-Margin Stocks
The profit made by these companies as compared to their earnings is immense:
Indian Energy Exchange (IEX): net profit margin of about 72, ROCE of about 50 and ROE of about 38.
CDSL (Central Depository Services): The profit margin is approximately 52% with ROCE of about 40 and ROE of about 31.
Nippon life India Asset Management: profit margin of approximately 54, ROCE of about 36, ROE of approximately 30.
Examples of large-caps that have a consistent high margin performance:
Hindustan Zinc: 5Y avg net profit margin approximates to be 32 with a current margin approximating 29.6.
Power Grid Corp of India: Margins of above 30.
ITC and Bajaj Finance: Margins v.26-28, top 500 of Nifty performers.
leading mid-cap and small-cap competitors:
HDFC Asset Management: Approx. profit margin = 57%.
Oberoi Realty, Oracle Financial Service, Vedant Fashions, NHPC margins are at around 30-42.
Net profit margins of small-caps such as Indian Energy Exchange Ltd, Nalwa Sons investments, Coral India finance, Garbi Finvest and Welspun investments are in the range of 60-86.
In the case of high ROE (Return on Equity) Stocks
High ROE shows that the equity is used effectively to make profits:
Nestle India: 5Y average ROE ~87%.
Colgate Palmolive India: ~61%.
Other high ROE companies are Infosys (ROE of nearly 32 percent), Hindustan Zinc (nearly 55 percent), and Titan and TCS among big-caps.
High Profit Growth Stories in the recent past
Tilaknagar Industries: Q1 net profit increased by approximately 121 percent and this occasioned an intraday share price increase of about 8 percent.
Titan Company: Q1 profit shot up by an average of 52.5 percent due to the rise of gold prices and the growth in the demand of watch segment.
LIC: Net profit has been increasing by around 5 percent and the margin has improved mostly due to high-margin products with VNB margin increasing to around 15.4 percent.
Summary Table -Powerful Profit Drivers
| Category | Companies |
|---|---|
| Highest Profit Margins | Ujaas Energy, Eraaya Lifespace, Dolphin Offshore, Technvision Ventures, etc. |
| Highest ROE (Return on Equity) | Nestle India, P&G Hygiene, Colgate India, Infosys, Hindustan Zinc, etc. |
| Highest 1-Year Returns | Tilaknagar Industries, Titan, LIC, etc. |
Main Insights and Reflections
Big Returns = Big Risk: Small companies with massive returns (e.g. Ujaas Energy) may be volatile.
Margins Matter: High net profit margins over time are a sign of strong business moats- particularly in companies such as IEX, CDSL and AMCs.
ROE & ROCE Are indicators of Quality: High and stable ratios (such as Nestle, Colgate) can be an indicator of long-term profitability.
Be Vigilant: Gains on profits such as that of Tilaknagar may be short-lived but need close follow up.
Final Thought
Those who want really high-profit shares, the actual strength is in companies who have high margins and returns on equity- IEX, CDSL, Nippon AMCs, HDFC AMC, Nestle India, this is good and sustainable. It is tempting but highly risky, as they have higher returns on small stocks. A pairing strategy: combine big caps with some small high-momentum trades to even out your opportunity space.
