Top Small-Cap Stocks With High Investment Returns In 2024
Introduction
Small-cap stocks come with high-risk potential. Thus, they are ideal for investors with a high-risk tolerance. If you’re interested in adding small-cap stocks to your portfolio in 2024, here’s useful information on the stock’s features and the best ones to pick.
Factors to consider while investing in small-cap stocks
Small-cap stocks are characterised by a market capitalisation of less than Rs. 5,000 crores. You must analyse the following factors before investing in small-cap stocks.
- Company growth
Generally, investors evaluate a company’s growth by studying how much it is earning and the money available in hand. The cash flow for small-cap companies can be limited. So, it is a good idea to check the annual revenue. You must also track the operating margins to understand if a company is efficient at converting its sales into profits.
- Company’s management
Another aspect to look into is the company’s top management, such as the CEO, CFO, etc. Study their background to understand if they have managed a successful business before. You must also assess if the top management has shares in the company because it signals their trust in the business and dedication to its success.
List of the best small-cap stocks for investment in India in 2024
- Tips Industries Ltd.
Tips Industries Ltd. is an Indian company engaged in film production, promotion, and distribution. It is also a music record label. It was founded in 1975 by Ramesh S. Taurani and Kumar S. Taurani. The company was listed on July 1, 1999. Some popular films it has produced include Raja Hindustani, Fida, Race, Ishq Vishk, Jab Pyaar Kisise Hota Hai, and Raaz.
As of April 17, 2024, Tips Industries had a market capitalisation worth Rs. 5,917 crore. Its trailing twelve-months (TTM) price-to-earnings (PE) ratio was 49.44. The stock’s trading price was Rs. 460.80.
- Aditya Vision Ltd.
Aditya Vision Ltd. is a multi-brand consumer electronics retail chain company. It was established in 1999, with its headquarters in Patna, Bihar. Over the years, its retail stores have expanded with a presence in all districts of Bihar and all major cities of Uttar Pradesh and Jharkhand.
Aditya Vision had a market capitalisation worth Rs. 4,280 crore as of April 17, 2024. Its TTM PE ratio was 56.32, and the trading price was Rs. 3,338.95.
- Indian Energy Exchange Ltd.
The Indian Energy Exchange is an electronic trading exchange incorporated on June 27, 2008. The Central Electricity Regulatory Commission (CERC) regulates its operations. It is neutral, transparent, automated, and demutualised. It brings together various participants in the power market, including power traders, power producers, State Electricity Boards, and Open Access Consumers.
As of April 17, 2024, the company’s market capitalisation was Rs. 13,214 crore. Its trading price was Rs. 148.20, and the TTM PE ratio was 38.59.
- Central Depository Services Ltd.
The Central Depository Services Ltd. (CDSL) was incorporated in 1999 after receiving a certificate for commencement of business from the Securities and Exchange Board of India (SEBI). It is India’s largest depository based on the number of demat accounts. It was listed on the National Stock Exchange (NSE) through an initial public offering (IPO) on June 30, 2017.
The CDSL had a market capitalisation worth Rs. 20,644 crore as of April 17, 2024. Its TTM PE ratio was 58.48, and its stock’s trading price was Rs. 1,975.55
- ICICI Securities Ltd.
ICICI Securities Ltd. is a leading technology-based financial services firm offering services such as retail broking, institutional broking, investment banking, private health management, and financial product distribution.
As of April 17, 2024, the securities firm had a market capitalisation worth Rs. 23,034 crore. Its stock’s trading price was Rs. 712.35, and the TTM PE was 16.19.
Wrapping up
Every mid or large-cap company was once a small-cap company. When these companies grow their business and profits, they step up the ladder to become midcap or large-cap companies. Considering their high growth potential, these companies carry a higher investment risk. Investors attracted toward small-cap companies follow an aggressive approach and have a higher risk tolerance. If you fit this investor profile, the above-mentioned small-cap stocks are good bets for you in 2024.
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