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Best Smallcap Dividend Growth Stocks in India

Dividend growth stocks are those stocks in which the dividend payout is high and also growing. Such stocks offer the best of both worlds. The have a high dividend payout and the payout increases every year.

Here's a list of Smallcap dividend growth stocks in India.

(Rs m)
Adj. DPS
(3 yrs CAGR, %)
(Curr FY, x)
(Latest, %)
Profit CAGR
(3 yrs, %)
INDIA PESTICIDES215.024,760506.8%
ADVAIT INFRATECH268.02,734329.4%0.2NM5.914.3%6.8%28.8%
DATA PATTERNS1,394.078,039304.3%
PREMIER POLYFILM78.71,649194.8%0.419.12.315.5%5.3%29.9%
INDO BORAX109.73,519185.7%
DISA INDIA8,025.011,670182.8%
RAJRATAN GLOBAL WIRE788.840,048176.4%0.434.310.236.5%13.9%67.0%
CHEVIOT CO.1,008.06,065173.3%
HINDUJA GLOBAL1,033.954,301164.8%
KSOLVES INDIA342.64,061157.2%0.018.821.593.6%33.4%363.2%
GRM OVERSEAS193.111,586156.2%1.617.44.841.1%7.5%110.4%
SULA VINEYARDS358.030,164155.7%0.6NM2.013.3%13.2%93.7%
CLEAN SCIENCE & TECH1,348.0143,208138.8%0.051.715.229.8%33.4%32.8%
HINDPRAKASH INDUSTRIES81.0844129.3%0.2NM2.17.2%2.7%NM
HINDPRAKASH INDUSTRIES64.1668129.3%0.3NM2.17.2%2.7%NM
TTK PRESTIGE696.696,552121.3%
DHANUKA AGRITECH642.329,273118.6%
BEST AGROLIFE1,080.025,536115.2%0.810.74.931.8%8.7%181.6%
JAGSON PHAR295.07,728100.0%
VAIBHAV GLOBAL297.549,08096.9%
MORGANITE CRUC870.34,87491.7%

Disclaimer: This is for information purposes only. These are not stock recommendations and should not be treated as such. Learn more about our recommendation services here... Also note that these screeners are based only on numbers. There is no screening for management quality.

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Which are the top smallcap dividend growth stocks in India right now?

As per Equitymaster's Stock Screener, these are the top smallcap dividend growth stocks in India right now -

These smallcap companies are ranked based on the growth in dividend per share paid out in the past three years. A high value indicates that the company is paying out relatively more of its earnings in the form of dividends.

There are other parameters you should take into account as well before forming a hard opinion on the stock.

What are dividend growth stocks?

As the name suggests, dividend growth stocks are stocks that offer a high rate of dividend growth. These companies have consistently paid dividends at an increasing rate every year.

These stocks would normally have manageable levels of debt and growing revenues and profits.

What are smallcap stocks?

According to the market regulator, smallcap stocks are companies which rank 251st and beyond in terms of their market capitalisation.

Investing in them is perceived to be risky. However, the potential for higher returns makes them an appealing investment avenue.

Should you invest in dividend growth stocks?

By keeping a steady hand and staying disciplined, investing in dividend growth stocks can provide a stable, growing income stream over time.

A quality dividend growth stock can provide you with a rising income from your investment, which you can then reinvest into more shares, creating an exponentially growing income stream over time.

However, before investing in dividend growth stocks, be sure to check the fundamentals of the company. Sustained research must not be compromised despite the odds.

How much should you invest in dividend growth stocks?

Allocation to stocks cannot be determined by the dividends fetched from them. Rather investors must keep in mind that even high dividend yield stocks like Coal India have eroded shareholder wealth and bit the dust due to poor capital allocation, lack of corporate governance, and management apathy.

So, investors should bear in mind that all high dividend yield stocks are NOT wealth creators...even over the long-term.

Allocation to dividend stocks must depend on the marketcap of the company in question. If the company is a bluechip or a smallcap stock, please allocate funds to the stock accordingly.

Further, we believe that a single stock should ideally not comprise more than 5-6% of the total money allocated towards equities

What kind of business pay dividends at a growing rate?

A company can do two things with the profits that it earns - It can either plough the profits back into the company for investing in capex, new products or distribution or pay out the amount as dividend and become a dividend stock.

As such, dividend payout depends a lot on the cash (after meeting its capital expenditure and working capital requirements) a company generates during a year.

Often companies do not need to reinvest into the business purely because they don't see the need for it.

A classic example would be of companies from the FMCG sector. The FMCG sector is a slow yet steady growing industry. But yet, companies choose to pay out huge dividends due to the sector's slow growing nature as capex requirements are on the lower side.

As against this commodity businesses like cement, steel, textile or even capital goods and telecom businesses need to constantly reinvest cash. This leaves very little on the table to pay to shareholders by way of dividends.

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