Synopsis:
Waaree Renewable, Amal, Natco Pharma, Zen Technologies, and ITDC are fundamentally strong companies that have shown consistent growth in revenue and doubled their earnings per share over the past three years.
The following is a list of fundamentally strong companies that have shown consistent year-over-year revenue growth, with each maintaining a Return on Equity (ROE) and Return on Capital Employed (ROCE) above 20%. Additionally, these companies have more than doubled their Earnings Per Share (EPS) over the past three years.
1. Waaree Renewable Technologies Ltd
Waaree Renewables Technologies Ltd (WRTL), incorporated in 1999, is engaged in renewable power generation and consultancy services. Operating under Waaree Energies Ltd, WRTL leads the Solar EPC sector and has completed over 10,000 solar projects with a total operational capacity exceeding 2.5 GW.
With a market valuation of Rs. 11,596 crores, Waaree Renewable Technologies Ltd is a major player in the renewable energy industry and is currently trading at Rs. 1,112. It has a price-to-earnings ratio of 39.9x, which is slightly lower than the industry average of 43.8x.
With a ROCE of 84.9 percent, ROE of 65 percent, and an exceptionally low debt-to-equity ratio of 0.06, it indicates sound fundamentals and financial stability. Its sales, profit, and stock price have grown at a 3-year CAGR of 118%, 125% and 161% respectively. With good revenue and profit growth, its EPS has grown at a 3-year CAGR of 123.93% from Rs. 1.96 in FY22 to Rs. 22.01 in FY25.
2. Amal Ltd
Amal Ltd., was founded by the Piramal Group in 1974–1975 and later purchased by Atul Ltd. in 1985–1986. The company produces and sells bulk chemicals like sulphuric and oleum as well as downstream products like sulphur dioxide and sulphur trioxide.
With a market valuation of Rs. 1,308 crores, Amal Ltd is trading at Rs. 1,058, at a price-to-earnings ratio of 34.2x, which is slightly lower than the industry average of 35.2x.
With a ROCE of 36 percent, ROE of 34.6 percent, and zero debt, it exhibits strong fundamentals and financial stability of the company. Its sales, profit, and stock price have grown at a 3-year CAGR of 46%, 198% and 57% respectively. With good revenue and profit growth, its EPS has grown at a 3-year CAGR of 187.2% from Rs. 0.9 in FY22 to Rs. 23.69 in FY25.
3. Natco Pharma Ltd
The pharmaceutical company NATCO Pharma Limited was founded in 1981 and is headquartered in Hyderabad. It is a well-known pharmaceutical company with a vertically integrated business model and a strong emphasis on research and development.
It creates, produces, and sells intermediates, active pharmaceutical ingredients (APIs), and finished dosage formulations (FDFs), serving both domestic and international markets.
Natco Pharma, with a market capitalization of Rs. 18,178 crores, is trading at Rs. 1,015. It is showing signs of undervaluation with a low P/E ratio of 9.65x, which is significantly lower than the industry average of 35x. The business’s ROE of 28 percent and ROCE of 32.8 percent demonstrate strong capital returns.
Its sales, profit, and stock price have grown at a 3-year CAGR of 32%, 139% and 16% respectively. With good revenue and profit growth, its EPS has grown at a 3-year CAGR of 124.44% from Rs. 9.31 in FY22 to Rs. 105.26 in FY25.
4. Zen Technologies Ltd
Founded in 1996, Zen Technologies Limited is a defence technology company that designs, develops, and produces counter-drone and combat training systems for security and defense forces. The company is a major contributor to the indigenization of advanced technologies for the Indian state police forces, paramilitary groups, and armed forces.
With a market valuation of Rs. 17,190 crores, Zen Technologies Ltd, trading at Rs. 1,874. It has a price-to-earnings ratio of 61.3x, which is marginally lower than the industry average of 72.6x.
The business’s return on equity (ROE) of 26.1 percent and return on capital employed (ROCE) of 36.7 percent showed effective use of capital. Its debt-to-equity ratio is low at 0.04, indicating manageable leverage.
Its sales, profit, and stock price have grown at a 3-year CAGR of 141%, 411% and 122% respectively. With good revenue and profit growth, its EPS has grown at a 3-year CAGR of ~216% from Rs. 0.25 in FY22 to Rs. 31.04 in FY25.
5. India Tourism Development Corporation Ltd
The India Tourism Development Corporation Ltd. (ITDC), a Government of India initiative founded in October 1966, carries out a variety of tourism-related activities.
The company runs hotels and restaurants, offers transport services, creates and distributes promotional materials for tourists, and provides duty-free shopping and entertainment for visitors.
India Tourism Development Corporation Ltd, with a market capitalization of Rs. 5,219 crores, is trading at Rs. 608. It is showing signs of overvaluation with a P/E ratio of 63.3x, which is significantly higher than the industry average of 39.1x. The business’s ROE of 21.6 percent and ROCE of 27.3 percent demonstrate strong capital returns.
Its sales, profit, and stock price have grown at a 3-year CAGR of 25%, 151% and 25% respectively. With good revenue and profit growth, its EPS has grown at a 3-year CAGR of 122% from Rs. 0.79 in FY22 to Rs. 9.51 in FY25.
Written By Akshay
Disclaimer
The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Trade Brains Technologies Private Limited or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
