Alpha is a measure of a stock’s performance relative to a benchmark index, such as the Nifty 50. It represents the excess return an investment generates over the expected return based on its risk level, often used to gauge the skill of a fund manager or an investment strategy. A positive alpha indicates that a stock has outperformed its benchmark, while a negative alpha suggests underperformance.
Building Investment Strategy and High Alpha Stocks
Investors use alpha to build strategies by selecting stocks or funds that generate higher returns than the market, adjusting for risk. Stocks trading at a high alpha are considered to have strong potential for growth, often outperforming their peers or market expectations. These stocks attract investors looking for higher returns, but they also tend to carry higher risk. Investing in high-alpha stocks can be rewarding, but requires careful analysis and monitoring.
List of Stocks with high Alpha are:
Kaynes Technology India Ltd
1-year return: 154%
Kaynes Technology is a leading provider of electronics manufacturing services (EMS), specializing in offering solutions to various sectors, including automotive, consumer electronics, and industrial markets. The company is recognized for its cutting-edge technologies in the design and manufacturing of complex electronics and has established a strong reputation in the EMS industry.
In terms of financial performance, Kaynes saw a substantial increase in sales from ₹292 crore in September 2023 to ₹433 crore in September 2024, a growth of 48.2%. EBITDA rose by 87.2%, from ₹39 crore to ₹73 crore, while the operating margin (OPM) improved from 13% to 17%. Net profit more than doubled, growing by 152%, from ₹25 crore to ₹63 crore. The impressive financial growth reflects Kaynes’ strong operational efficiency and growing market demand.
Dixon Technologies (India) Ltd
1-year return: 165%
Dixon Technologies is a prominent player in the electronics manufacturing services (EMS) industry, offering design and manufacturing services for various consumer electronics, home appliances, and lighting products. It serves a diverse range of customers and has established itself as a major contributor to India’s electronics industry.
Dixon reported a robust growth in its financials, with sales rising from ₹4,943 crore in September 2023 to ₹11,534 crore in September 2024, a growth of 133%. EBITDA also witnessed a
significant rise, from ₹199 crore to ₹426 crore, reflecting an increase of 114%. The operating profit margin remained steady at 4%, while net profit surged by 264%, from ₹113 crore to ₹412 crore. This exceptional growth highlights Dixon’s expanding footprint and growing market share.
Shakti Pumps (India) Ltd
1-year return: 618%
Shakti Pumps specializes in the manufacturing of energy-efficient pumps, solar pumps, and pumping solutions for various industries, including agriculture, residential, and commercial sectors. The company’s focus on energy-efficient and eco-friendly solutions has driven its growth and positioned it as a leader in the Indian pump manufacturing industry.
Shakti Pumps reported impressive financial growth, with sales increasing from ₹153 crore in September 2023 to ₹635 crore in September 2024, representing a 314% increase. EBITDA surged from ₹15 crore to ₹149 crore, reflecting an 896% increase, and the operating margin
improved from 10% to 23%. Net profit saw a significant jump of 1617%, from ₹6 crore to ₹101 crore. This performance reflects the strong demand for Shakti’s energy-efficient pumps and its successful product diversification.
Mazagon Dock Shipbuilders Ltd
1-year return: 93.4%
Mazdock is a leading shipbuilding company specializing in the construction of defense and commercial vessels. The company has earned recognition for its expertise in building high-quality ships and has successfully secured large contracts in the defense sector, contributing to India’s growing maritime capabilities.
Mazdock reported strong financial growth, with sales increasing from ₹1,828 crore in September 2023 to ₹2,757 crore in September 2024, a growth of 51%. EBITDA rose significantly, from ₹177 crore to ₹511 crore, marking a 188% increase. Operating margin improved from 10% to 19%, and net profit surged by 75.8%, from ₹333 crore to ₹585 crore. These results reflect Mazdock’s dominant position in the shipbuilding industry and its growing order book, especially in defense.
Written By: Dipangshu Kundu
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