Best Micro Cap Stocks in India: In a raging bull market, risk-taking investors are on the lookout for small cap and micro cap stocks in the hope of multi-bagger returns. It is believed that small companies can grow at a faster rate than their larger counterparts.
Thus, a fast-growing, fundamentally strong stock with a huge market to tap into can bring impressive returns to investors. In this article, we’ll read about the best micro cap stocks in India which you can add to your watchlists.
5 Best Micro Cap Stocks in India
We’ll begin our study by understanding the businesses and scale of operations of the respective companies. In the process, we’ll also equip ourselves with the key financial metrics of the stock. So without further ado, let us jump in.
Best Micro Cap Stocks #1 – Control Print
|CMP||₹645||Market Cap (Cr.)||₹1,053|
|Promoter Holding||51.8%||Book Value||₹180|
|Debt to Equity||0.02||Price to Book Value||3.7|
|Net Profit Margin||17%||Operating Margin||25%|
Founded 30 years ago, Control Print Ltd. (CPL) is engaged in the manufacturing and sales of different types of printing machines, associated spare parts, consumables (fluids & inks) and allied services.
CPL’s products are used in various industries including agrochemicals, automotive, food & beverages, cables & wires, chemicals & lubricants, pharmaceuticals, packaging, dairy, and more. It counts well-known companies such as Colgate, Cadbury, Indian Oil, Parle, ITC and others as its clients.
Its Continuous InkJet Printer, High-Resolution Printer, Thermal Transfer Overprinter, Large Character Print, and other products are used for batch coding, marking, laser coding, and more on different surfaces as per specifications.
As for the scale of operations, Color Print commands an 18.5% marking and batch printing market share in India. It has a field staff of over 300 employees serving more than 2,500 pin codes in 1,600+ cities and towns in India.
Control Print is debt-free micro cap stock with a market valuation of Rs 1,053 crore. It reported a profit after tax of Rs 53 on sales of Rs 304 crore while clocking a strong net profit margin of 17.3%.
Best Micro Cap Stocks #2 – Ambika Cotton Mills
|CMP||₹1,627||Market Cap (Cr.)||₹932|
|Promoter Holding||50.2%||Book Value||₹1,426|
|Debt to Equity||0.00||Price to Book Value||1.1|
|Net Profit Margin||13%||Operating Margin||21%|
Incorporated in 1988, Ambika Cotton Mills Ltd. (ACML) is a Coimbatore-based producer of cotton yarn and knitted fabric of different varieties. Its high-quality yarn is used by textile manufacturers globally to produce premium shirts and t-shirts.
ACML has five manufacturing facilities in the state of Tamil Nadu with a total spindle capacity of 1,08,288 spinning and knitting. The company holds a special niche in the textiles sector because of its 100% contamination-free premium yarns and timely delivery fulfilment.
It imports cotton from abroad along with sourcing from India to maintain steady production. Likewise, its products are exported globally with revenues from abroad constituting roughly 65% of the total revenue.
Barring the Covid-19 led-pandemic affected years, the topline and bottom line of Ambika Cotton Mills consistently grew in the past few years. FY22 was the best year historically for the company as it reported Rs 244 crore in profits on the back of strong export demand.
However, its FY23 revenue and net profit were lower at Rs 848 crore and Rs 152 crore in FY23 because of margin compression and weakened demand. Overall, ACML is a debt-free fundamentally strong micro cap stock offering a good return on equity of 14.5%.
Best Micro Cap Stocks #3 – Antony Waste Handling Cell
|CMP||₹336||Market Cap (Cr.)||₹937|
|Promoter Holding||46.2%||Book Value||₹172|
|Debt to Equity||0.73||Price to Book Value||2.0|
|Net Profit Margin||10%||Operating Margin||17%|
Over 2 decades old, Antony Waste Management Cell Ltd. (AWHCL) is one of the leading waste management companies in India. It is one of the top five players in the domestic Municipal Solid Waste (MSW) management sector.
AWHCL is engaged in the business of the collection & transportation, processing, and mechanized sweeping of municipal solid waste. It takes projects under these activities and has successfully delivered over 25 projects as of the present date.
Furthermore, the waste management company is presently executing 18 projects out of which 12 are for collection and transportation, 2 for processing and 4 for mechanized sweeping.
The company made its stock market debut in January of 2021 listing its shares on Indian bourses. It had a successful IPO with its shares listing at a premium of 38%.
However, the stock has fallen some 20% since then and presently trades at a P/E of 14 giving a market capitalization of Rs 937 crore to business.
Best Micro Cap Stocks #4 – D-Link India
|CMP||₹259||Market Cap (Cr.)||₹918|
|Promoter Holding||51.0%||Book Value||₹102|
|Debt to Equity||0.03||Price to Book Value||2.6|
|Net Profit Margin||7%||Operating Margin||10%|
D-Link India is a subsidiary of the Taiwanese MNC networking equipment giant D-Link. The promoter entity has operations in over 57 countries across the globe and owns a majority 51% share in the Indian entity.
D-Link India is involved in the distribution and marketing of networking and other technology equipment products for retail and commercial usage. It has a robust distribution network through which it sells multiple products including Wi-Fi routers, adapters, switches, cables, CCTV solutions and more.
Along with selling products, the company also provides cloud and other services to complement its product portfolio.
The net profits of the company, which more than doubled in FY23 to Rs 86 crore have grown consistently over the previous six years. Similarly, the top line also grew at a steady rate to Rs 1,181 crore in the recent fiscal.
D-Link India is a debt-free fundamentally strong stock presently trading at an attractive P/E of 11. Furthermore, this micro cap stock offers an attractive return on equity of 26%.
Best Micro Cap Stocks #5 – Sigachi Industries
|CMP||₹296||Market Cap (Cr.)||₹910|
|Promoter Holding||48.5%||Book Value||₹87|
|Debt to Equity||0.17||Price to Book Value||3.4|
|Net Profit Margin||14%||Operating Margin||19%|
Sigachi Industries Ltd. was established three and a half decades ago in 1989. It is a prominent producer of microcrystalline cellulose (MCC) based excipients globally. Excipients are inert substances used for the delivery of actual drugs. They find their end applications in the pharmaceutical, supplement and food industries.
The company has developed expertise in the production of 60+ preformulated excipients as per international quality standards. Its three manufacturing units in Gujarat and Telangana help to cater for clients from over 50 countries globally.
Furthermore, Sigachi owns a state-of-the-art research and development facility for continuous product improvement. In addition to all this, it operates and manages production facilities owned by GACL.
It is also engaged in the contract manufacturing of sodium chlorate, stable bleaching powder and poly aluminium chloride.
Sigachi Industries went public in November 2021 with its IPO getting oversubscribed by 101.91 times. This resulted in a threefold increase in value for the investors of the company. However, since then, the stock has come down from its listing price of Rs 575 to Rs 296 per share, giving a micro cap valuation of Rs 910 crore to the company.
List of Top Micro Cap Stocks in India
We learnt about the businesses and the key metrics of the top micro cap stocks in India above. The table below puts together more such stocks.
|Company Name||CMP||Market Cap (Cr)||Industry|
|Chemcon Speciality Chemicals||₹271||₹993||Chemicals|
|Ambika Cotton Mills||₹1,627||₹931||Textiles|
|Antony Waste Handling Cell||₹336||₹937||Waste Management|
|Man Industries (India)||₹144||₹866||Pipes|
|Hercules Hoists||₹258||₹824||Industrial Goods|
We learnt about different stocks from various industries for our study of the top micro cap stocks in India. Most of these companies have exhibited fast growth in recent fiscals. This makes them attractive bets for the quarters ahead.
However, investors should closely track quarterly results and management guidance to keep track of where the stock is going. Any decline in the topline or bottom line can result in wide fluctuations in the stock price.
In your opinion, what factors should investors keep in mind while investing in micro cap stocks? Which are your favourite micro cap stocks? How about we continue this conversation in the comments section below?
Written by Vikalp Mishra
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