Three companies in my watchlist, Having potential to grow 30-40% over next few years. If market goes down, I will keep accumulating them for long term. By Balu Gorade.

1: Mapmy India

Overview: Mapmy India is a prominent provider of advanced digital maps, geospatial software, and location-based IoT technologies.
Industry Growth: The mapping industry is witnessing rapid growth. The company has set a target of achieving 1000cr revenue by 2028, up from the current 227Cr, indicating a CAGR growth of over 40%.
Unique Selling Proposition: Unlike Google and other foreign companies, which cannot store mapping data due to government regulations and hence outsource from Indian IT firms, Mapmy India can store and manage this data.
Business Model: While Google primarily focuses on B2C and earns through ads, Mapmy India operates in the B2B space and charges fees for its services.
Financial Health: The company boasts an asset-light and cash-rich balance sheet with an impressive ROCE of over 30%.
Future Prospects: The advent of autonomous vehicles will open up a vast market. Additionally, the company has the potential to tap into the B2C segment, indicating a bright future.
Valuation: Currently trading at a P/E ratio of 75X, the stock may seem pricey. However, with proper execution, it could be a reasonable investment.

2. SG Finserve

Overview: SG Finserve is an NBFC supported by the Apl Apollo group, known for its success with Apl Apollo tubes.
Opportunity Identification: Apl Apollo’s management observed that their suppliers, due to poor financial metrics, often fall prey to high-interest rates from unorganized lenders.
Strategic Move: To address this, they acquired Moongipa Securities NBFC in 2022, aiming to offer instant loans to their suppliers, dealers, and retailers at competitive rates.
Partnerships: The company has business ties with Kajaria, Vedanta, Jindal, Redington, and banking partnerships with HDFC, Axis, BoB, Kotak, Bajaj Fin, among others.
Performance: The company has zero NPAs and has disbursed loans worth 4100cr, doubling in just two years. The number of borrowers has also surged from 344 to 851 during the same period.
Future Goals: In the next three years, SG Finserve aims to triple their loan book and increase their PAT from 18cr to 132cr and ROE from 11% to 15%.
Valuation: Traditional valuation metrics like P/B suggest it’s priced at 8X, which might seem high. However, considering the forward P/E of around 30X, it appears promising.

3. Xpro India

Overview: Xpro India is betting on EMS and operates two business divisions: Coex and Biax.
Coex Division: Xpro is the leading supplier of Coextruded Sheets/Liners to the Indian Refrigerator Industry. Despite generating 73% of the revenue, it contributes only 40% to the profit due to its commodity nature and low margins.
Biax Division: This segment is the primary growth driver, producing dielectric films used in sunrise sectors. They hold a 32-33% market share in India and face no domestic competition. They’re expanding with a 500cr capex, with the first line expected to be operational by FY25.
Financials: The company has been de-leveraging its balance sheet. The Biax division, despite contributing only 23% of the revenue, accounts for 60% of the PAT.
Future Outlook: With the upcoming capex, margins are expected to rise, and PAT should compound at a faster rate.
Valuation: The stock is trading at a P/E of 35X, which isn’t particularly cheap.

Disclaimer: The author holds small positions in these companies and may invest more during market corrections. These insights are based on a long-term perspective and are not buy/sell/hold recommendations. Always conduct your research before making any investment decisions.