5 Fastest Growing Smallcap Stocks to Watch Out for in 2025

Small-cap stocks can offer exceptional returns, but you must be prepared to do the work. Focus on businesses you understand and avoid the hype. - Warren Buffett

Small-cap stocks often fly under the radar, but they hold immense potential for investors seeking high-growth opportunities.

When we say smallcaps, these are companies that fall in the market capitalization range between Rs 10 billion (bn) and Rs 150 bn.

While they carry higher risks than large-cap counterparts, their ability to grow rapidly makes them a favorite among knowledgeable investors.

In this article, we spotlight the fastest-growing small-cap stocks that are set to make waves in 2025, offering the perfect blend of growth potential and market momentum.

If you're looking to add high-growth gems to your portfolio, these stocks deserve a closer look.

To find such gems, we applied a screener query on the entire BSE Smallcap index (which comprises more than 900 stocks), and filtered the ones with the highest sales growth in the past 3 years, and which are also profitable.

These are not stock recommendations. Investors should do their own research and do due diligence before considering any investment in the stock market. Also, investors should pay close attention to corporate governance while performing their due diligence.

With that disclaimer out of the way, let's look at the five fastest-growing small-cap stocks and what the future holds in store for them...

#1 Ganesh Housing Corp.

First on the list is Ganesh Housing Corp.

Ganesh Housing Corp. is in the business of real estate development and infrastructure projects.

It has sold over twenty-two million (m) sq. ft. of real estate space, with another thirty-five m sq. ft. under development.

Additionally, the company aims to extend its presence into special economic zones and township format development.

It has completed 17 residential & 4 commercial projects till now. Currently, it has 2 residential and 1 commercial project to be completed by March 2027.

It has been net debt-free for more than 8 quarters and the management is confident about maintaining a strong capital structure in the coming quarters.

The company's revenue has grown at a compounded annual growth rate (CAGR) of 73% in the last three years.

Here's a table showing the company's historical financials.

Financial Snapshot of Ganesh Housing Corp.

Rs m, consolidated	FY20	FY21	FY22	FY23	FY24
Net Sales	2,750	1,716	3,836	6,163	8,920
Growth (%)	5%	-38%	124%	61%	45%
Operating Profit	-527	-482	1,342	2,518	6,231
OPM (%)	-19%	-28%	35%	41%	70%
Net Profit	-1,200	-1,052	706	1,001	4,607
Net Margin (%)	-44%	-61%	18%	16%	52%
Debt to Equity (x)	0.9	0.8	0.2	0.0	0.0
ROE (%)	-17.5	-18.7	10.9	10.8	34.6
ROCE (%)	-4.1	-3.8	14.5	24.6	46.1

Source: Equitymaster

The management believes that increased competition and land prices will positively impact their sales price, allowing them to maintain profitability.

Additionally, the company's management is optimistic about maintaining growth momentum, projecting a 30% growth in the bottom-line year-on-year (YoY).

Although Ganesh Housing Corp is preparing for potential cost increases due to inflation, it's confident in its pricing strategy.

With Union Budget 2025 approaching, investors could expect some positive momentum building up. As recent trends suggest, investors expect sops and reliefs for the realty sector and home buyers.

Coming to its valuations, Ganesh Housing shares are trading at a price to earnings (PE) multiple of 21.3 compared to its 5-year average of 21.8.

If we look at the price to book value (PB) multiple, the stock is trading at a PB multiple of 6 compared to 5-year average of 2.5.

To know more, check out Ganesh Housing Corp's financial factsheet.

#2 RattanIndia Enterprises

Second on this list is RattanIndia Enterprises.

RattanIndia Enterprises is the flagship company of RattanIndia Group. It comprises of tech focused new age businesses including e-commerce, electric vehicles (EVs), and drones.

Under its e-commerce division, the company operates through Cocoblu Retail and Neobrand.

Cocoblu Retail is a subsidiary of the company. It has partnered with several big and small brands in India to bring them on its online retail platform. Cocoblu has tied up with over 136 amazon fulfillment centers.

Neobrand is engaged in the fast-growing B2B online fashion apparel business.

Under the EV division, the company acquired a 100% stake in the Revolt Motors brand in January 2023. Revolt is produces electric mobility products that are affordable and accessible.

The company's fintech division, via its subsidiary Neotec Enterprises, drives growth in digital lending with its innovative aggregator platform, 'Win.'

It offers a wide bouquet of services, including personal loans, two-wheeler loans, credit cards and business loans, making it a one-stop shop for all lending products. It has recently started an insurance broking business as well.

Under the drone division, the company through its subsidiary NeoSky India aims to provide 360-degree service to its clients via drone-as-a-product and drone-as-a-service.

Coming to its financials, the company's revenue has grown at a CAGR of 3,728% in the last three years while its net profit has grown at a CAGR of 3,834%.

Here's a table showing the company's historical financials.

Financial Snapshot of RattanIndia Enterprises

Rs m, consolidated	FY21	FY22	FY23	FY24
Net Sales	1	140	41,238	56,096
Growth (%)	-	13893%	29370%	36%
Operating Profit	-17	-85	-2,160	513
OPM (%)	-1674%	-61%	-5%	1%
Net Profit	0	5,539	-2,846	4,262
Net Margin (%)	7%	3958%	-7%	8%
Debt to Equity (x)	0.0	0.2	2.3	1.4
ROE (%)	0.0	141.4	-51.7	68.2
ROCE (%)	0.1	123.1	-20.7	33.8

Source: Equitymaster

Moving forward, RattanIndia intends to deepen its involvement in high-growth sectors through continued product innovation and market expansion.

In the EV segment, the company plans to increase its dealership network and broaden its EV lineup to include models for various customer needs.

It aims to leverage the recently approved government subsidies, which could further stimulate demand for EVs.

What's more, the company has entered a brand-new segment - stationery.

The company recently launched Neomate, a new stationery brand offering premium products at affordable prices through its wholly owned subsidiary Neobrands Limited.

Coming to its valuations, RattanIndia shares are trading at a PE multiple of 12.4 compared to its 5-year average of 17.6.

If we look at the P/BV multiple, the stock is trading at a P/BV multiple of 6.2 compared to 5-year average of 11.8.

To know more, check out the RattanIndia Enterprises financial factsheet.

#3 NIIT Learning Systems (NLSL)

Next on this list is NIIT Learning Systems.

NIIT Learning Systems offers managed training services (MTS) to companies across 30 countries.

Its comprehensive suite of MTS includes custom content and curriculum design, learning delivery, learning administration, strategic sourcing, learning technology, and consulting services.

The company also offers specialized solutions including immersive learning, customer education, talent pipeline as a service, digital and IT training as well as leadership and professional development services.

As of Q2 FY25, the company has 91 MTS customers with a revenue visibility of US$368 m. During the quarter, it added two new MTS customers and maintained a 100% renewal rate.

The company's revenue has grown at a CAGR of 213% in the last three years.

Here's a table showing the company's historical financials.

Financial Snapshot of NIIT Learning Systems

Rs m, standalone	FY20	FY21	FY22	FY23	FY24
Net Sales	245	130	3,285	4,038	4,002
Growth (%)	-30%	-47%	2422%	23%	-1%
Operating Profit	-113	-108	360	538	509
OPM (%)	-46%	-83%	11%	13%	13%
Net Profit	-266	-161	585	993	1,021
Net Margin (%)	-109%	-124%	18%	25%	26%
Debt to Equity (x)	-1.1	0.0	0.0	0.0	0.0
ROE (%)	0.0	0.0	32.1	24.1	20.3
ROCE (%)	-166.4	-575.7	35.1	22.7	23.7

Source: Equitymaster

The uncertainty in customer spending continued to pose a challenge, particularly in the management consulting and professional services sectors.

This is why the company acknowledged a delay in the growth pick up, pushing expectations for growth into Q3 and Q4 FY25.

The company has revised its revenue growth guidance from 12-14% to over 7% in constant currency terms for FY25. However, margins are expected to remain at the higher end of the guided range of 22% to 24%, despite the need to add headcount as growth resumes.

NIIT's management expressed confidence in maintaining margins through continued efficiency improvements and technology investments.

In active pursuit of inorganic growth opportunities, management remained optimistic about potential acquisitions in the next 3 to 4 years.

Coming to its valuations, NIIT shares are trading at a PE multiple of 26.4 compared to its 5-year average of 28.5.

If we look at the PB multiple, the stock is trading at a PB multiple of 5.7 compared to 5-year average of 6.5.

To know more, check out the NIIT Learning Systems financial factsheet.

#4 Maharashtra Scooters

Fourth is Maharashtra Scooters.

Maharashtra Scooters is a manufacturing & an unregistered core investment company (CIC). It is engaged in the business of manufacturing dies, jigs, fixtures and die casting components primarily for the automobiles industry, etc.

As a CIC, a minimum of 90% of its assets are invested in the Bajaj group and the balance in debt and other instruments.

The company is a subsidiary of Bajaj Holdings & Investment Limited, which holds a 51% stake in Maharashtra Scooters.

With respect to the manufacturing activity, the company faced several challenges in the previous year and is expected to face them in the upcoming years too.

This is in spite the expansion in the customer profile from auto component to telecom, generator, EV segments and LED light parts.

As of FY24, the company generated 95% of its revenue from investments in group companies and only 5% from the manufacturing of products.

The company's revenue has grown at a CAGR of 144% in the last three years while its net profit has grown at a CAGR of 183%.

Here's a table showing the company's historical financials.

Financial Snapshot of Maharashtra Scooters

Rs m, standalone	FY20	FY21	FY22	FY23	FY24
Net Sales	154	153	1,941	2,164	2,227
Growth (%)	6%	-1%	1170%	11%	3%
Operating Profit	-51	-48	1,738	1,937	2,034
OPM (%)	-33%	-32%	90%	90%	91%
Net Profit	1,799	88	1,427	1,953	1,993
Net Margin (%)	1170%	58%	74%	90%	89%
Debt to Equity (x)	0.0	0.0	0.0	0.0	0.0
ROE (%)	1.8	0.1	0.7	0.9	0.9
ROCE (%)	2.0	0.1	0.9	0.9	0.9

Source: Equitymaster

As of FY24, out of total investments amounting to Rs 293.6 bn, net investment in Bajaj Auto, Bajaj Finance, Bajaj Finserv, and Bajaj Holdings & Investment amounted to Rs 290.8 bn, the rest being invested in various debentures and mutual funds.

The investments made in the Bajaj Group have delivered remarkable value through dividends and capital appreciation to shareholders which it intends to continue.

Regarding the insignificant manufacturing activity of the company, which continues to operate at a loss, the management is reviewing its prospects with a possibility of discontinuance.

Coming to its valuations, Maharashtra Scooters shares are trading at a PE multiple of 63.2 compared to its 5-year average of 36.9.

If we look at the PB multiple, the stock is trading at a PB multiple of 0.4 compared to 5-year average of 0.3.

To know more, check out the Maharashtra Scooters financial factsheet.

#5 PNGS Gargi Fashion Jewellery

Next on this list is PNGS Gargi Fashion Jewellery.

P. N. Gadgil & Sons is in the retail business of costume and fashion jewellery under the brand name Gargi.

The company deals in 92.5% certified sterling silver jewellery, brass and copper jewellery, idols, and other gift articles.

It commenced commercial sale of 14 carat gold studded with natural diamond jewellery from October 2023.

Currently, the company has one online store, thirty-six offline stores, and one million jewellery designs.

As of FY24, Gargi generated 57%, 24% and 19% of its total revenue from sale of silver, diamonds, and non-silver jewellery, respectively.

The company's revenue has grown at a CAGR of 1,934% in the last three years while its net profit has grown at a CAGR of 1,184%.

Here's a table showing the company's historical financials.

Financial Snapshot of PNGS Gargi Fashion Jewellery

Rs m, standalone	FY21	FY22	FY23	FY24
Net Sales	0	59	287	505
Growth (%)	-	98883%	383%	76%
Operating Profit	0	15	66	112
OPM (%)	67%	26%	23%	22%
Net Profit	0	11	47	85
Net Margin (%)	67%	19%	16%	17%
Debt to Equity (x)	0.2	4.7	0.0	0.1
ROE (%)	24.1	194.6	43.2	34.1
ROCE (%)	23.2	46.6	46.9	44.1

Source: Equitymaster

The company successfully transitioned from FOCO (franchise owned, company operated) to FOFO (franchise owned, franchise operated) model in Q1 FY25.

Gargi's management is optimistic about reaching a top line of Rs 1 bn, on the back of anticipated strong demand in Q3, and Q4 FY25, particularly due to seasonal trends in the fashion jewellery industry.

Currently, the company is operating at 66 locations, including SIS (shop-in-shop) stores and brand shops.

Further, it has plans to expand 20-25% by year-end. It will be targeting both tier-1 and tier-2 cities, focusing on areas with high demand and potential customer base.

Gargi is also exploring additional product lines within the fashion and lifestyle categories, specifically targeting women.

Coming to its valuations, PNGS Gargi Fashion Jewellery shares are trading at a PE multiple of 64.8 compared to its 5-year average of 48.5.

If we look at the PB multiple, the stock is trading at a PB multiple of 15.8 compared to 5-year average of 16.6.

To know more, check out PNGS Gargi Fashion Jewellery's financial factsheet.

Snapshot of Fastest Growing Smallcap Stocks on Equitymaster Stock Screener

Here's a table that shows the fastest growing smallcaps across various parameters.

Conclusion

Fast-growing small-cap stocks represent a compelling opportunity for investors looking to capitalise on their high-growth potential and market innovation.

While these stocks often come with higher risks due to their volatility and market size, their ability to deliver substantial returns makes them a key component of a diversified investment portfolio.

As always, thorough research, a focus on strong fundamentals, corporate governance, and a clear understanding of your financial goals are essential when investing in small-cap stocks.

By staying informed and vigilant, investors can unlock the potential of these dynamic companies and pave the way for long-term wealth creation.

Happy Investing.

Disclaimer: This article is for education purposes only. It is not a recommendation and should not be treated as such. Learn more about our recommendation services here...