Growth is the only way listed companies generate wealth and value for their shareholders and other stakeholders, including employees. The younger and smaller the company, easier it is to grow. And the earlier you are able to pick future leaders, the better it is for you. In fact, during the last bear run, which ended in early 2003, many small companies gave double-digit annual returns on a consistent basis, even as frontline companies remained grounded.
ETIG has come out with its 2008 edition of fastest-growing small companies. Last year's list was dominated by companies from the then hot sectors such as real estate, capital goods and construction, with a sprinkling of IT companies. However, the toppers this time are now from less cyclical and asset-light sectors, especially infotech.
Take a look at the top 10 fastest-growing small companies:
ICSA India
This is the new face of the Indian IT industry — companies offering niche product and services with a clear differentiating factor. ICSA offers supervisory control and data acquisition (SCADA)-based IT solutions to power companies.
ICSA India had a market cap of Rs 1,305.2 crore (the average for September '08), besides having an average return on capital employed (RoCE) of 67.8% and interest coverage ratio (ICR) of 132.7, for the preceding three years.
Also, its compound average growth rate (CAGR) in sales and net profit for the preceding three years stood at 214.8% and 210%, respectively.
Allied Digital provides remote infrastructure management and systems integration in the domestic market. It is a leading IT Infrastructure management and technical support services outsourcing company.
It enables global, large and medium enterprises and service providers to reduce their total cost of ownership using a combination of onsite and remote services.
With an average market cap of Rs 1,239.2 crore in September '08, the company's three-year average RoCE stood at 62.8% and ICR at 103.5. Moreover, its sales recorded a three-year CAGR of 79.2%, while the CAGR of profit after tax stood at 211.6%.
As the name suggests, Prime Property Development Corporation is a real estate developer in India, based in Mumbai.
Its properties include information technology parks; commercial units comprising show rooms, shops, and offices; mall projects with anchor shop, shopping complex, multiplex, food court, entertainment area, and a hotel; and commercial-cum-residential projects.
The company had a market cap of Rs 120.2 crore (the average for September '08). Its three-year average RoCE stood at 48.1% and ICR at 394.7. Its sales recorded a three-year compound average growth rate of 86.4%, while the CAGR of profit after tax stood at 185.3%.
It is also engaged into merchant export of iron ore fines to China. The company is a member of CAPEXIL, FIEO and FIMI and is a recognized star trading house. At present,the company has run-of-mines contracts for two mines situated at Nuagaon and Maharajpur in Orissa.
Resurgere Mines' market cap (average for September '08) stood at Rs 733.5 cr, while the three-year average RoCE was recorded at 100.2% and ICR at 32.8. Its sales recorded a three-year compound average growth rate of 81%, while the CAGR of profit after tax stood at 561.4%.
The success of Sharon Bio-Medicine lies in its ability to expedite pace of product development by streamlining the processes and inculcating a culture of operational excellence. It offers contract research and manufacturing services for global pharmaceutical companies.Since its inception, the company has carved its niche by offering a distinct value proposition to its customers.
Sharon had a market cap of Rs 101.7 crore (the average for September '08). Its three-year average RoCE stood at 30.8 % and ICR at 747.8. Its sales recorded a three-year compound average growth rate of 93.3%, while the CAGR of profit after tax stood at 254.2%.
Tanla Solutions develops value-added solutions for mobile phones. It offers end-to-end mobile commerce, mobile entertainment, mobile internet and mobile advertising solutions.Tanla is a global provider of mobile commerce, mobile entertainment, mobile marketing and advertising solutions to the telecommunications, media and digital content industries. It has the distinction of being one of the first Indian companies to focus on integrated solutions and products for the wireless world.
With an average market cap of Rs 1,906.9 crore in September '08, the company's three-year average RoCE stood at 51.1% and ICR at 15.8. Moreover, its sales recorded a three-year CAGR of 173.8%, while the CAGR of profit after tax stood at 189.8%.
Northgate Technologies LimitedThe corner stone capabilities of Northgate Technologies' business are infrastructure (high capacity, highly scalable server farm), services (internet advertising tracking tool, instant messaging, short messaging, net telephony, global content delivery, video streaming, social networking, file sharing and downloading, gaming and many more), and monetization (mass monetization through fast growing global internet advertising industry).
Its core strengths of world-class server farm infrastructure, a rapidly-expanding global content distribution platform, popular internet properties, partnership with large web communities and own advertising network differentiates it from other peers who operate in only sector, the company claims.
Northgate Tech's market cap (average for September '08) stood at Rs 904.9 crore, while the three-year average RoCE was recorded at 31% and ICR at 1141.4.
Its sales recorded a three-year compound average growth rate of 102.1%, while the CAGR of profit after tax stood at 110.9%.
Venus Remedies India is a research and development driven, pharmaceutical manufacturing company. The company is constantly working to broaden the pipeline of products and to make a impact in the international markets.It has two manufacturing locations in India and one in Germany. Venus is a manufacturer of oncological and cefelosporine injectable products following EU-GMP norms for all is activities.
The company had a market cap of Rs 316.9 crore (the average for September '08), besides having an average return on capital employed of 43.2% and interest coverage ratio of 59.5, for the preceding three years.
Also, its compound average growth rate in sales and net profit for the preceding three years stood at 84.4% and 117.5%, respectively.
Geodesic LimitedGeodesic's mix of innovative products and high performance solutions has driven the company to profit right from its first year, according to the company.
With an average market cap of Rs 1,511.5 crore in September '08, the company's three-year average RoCE stood at 31.1% and ICR at 1027.3.
Moreover, its sales recorded a three-year CAGR of 98.9%, while the CAGR of profit after tax stood at 98.2%.
Info Edge (India) LtdIts business is managed primarily through four divisions, which comprise online recruitment classified division, online matrimonial classified division, online real estate classified division and offline executive search division.
Info Edge's market cap (average for September '08) stood at Rs 2,056.7 crore, while the three-year average RoCE was recorded at 60.4% and ICR at 11.4.
Its sales recorded a three-year compound average growth rate of 70.6%, while the CAGR of profit after tax stood at 451.8%.
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