Growth Stocks in India – Their Meaning, How to Find & Examples

4 min read | Updated on December 04, 2025, 11:28 IST

Growth stocks are shares of companies whose sales and profits are growing at a faster pace than the overall market or their industry. Being in high growth phase, these companies usually reinvest their earnings back into the business. These companies look to expand faster and thereby rapidly increase their market share.

Take for example companies like Zomato in food delivery or Trent (which operates Zudio stores) in retail. Both these businesses are growing fast, they are increasing their reach and capturing market share at a much faster pace than traditional companies.

Characteristics of Growth Stocks

Though each industry operates and scales up on different dynamics, growth stocks across sectors have certain peculiar characteristics. They are,

Growth stocks usually have above-average revenue growth, many a times, 20% or more annually.
Their earnings per share (EPS) grows consistently year after year.
They usually don’t pay dividends but reinvest profits into research, expansion or acquisitions.
These stocks often trade at high price-to-earnings (P/E) ratios because investors are willing to pay more for aniticipated growth. For instance, an IT company growing at 30% annually might trade at a P/E of 50 or 60, while the market average is 20-25.
Growth stocks also have strong return on equity (ROE). This shows they use shareholder’s capital efficiently to generate profits. Companies with ROE above 20% often qualify as growth stocks.

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Examples of Growth Stocks in India

As of 2025, several Indian companies can be classified as growth stocks across different sectors.

In retail, Trent Limited stands out with a top-line growth of 38% CAGR over five years and net profit CAGR of 72%. The company operates Westside and Zudio stores. It has expanded to over 1,000 stores across 242 cities.

Varun Beverages, the PepsiCo franchisee, has revenue growth of 23% CAGR and net profit growth of 41% CAGR over five years, with an impressive ROE of 25%.

These are just a few examples, there are many more such growth stocks.

How to Find Growth Stocks

We discussed the characteristics of growth stocks. To narrow the search for them, look at them through multiple lenses mentioned below,

Research industry trends

Look at sectors experiencing rapid change. Growth stocks often come from sectors like technology, healthcare, renewable energy, defence and consumer discretionary.

Analyse financial statements

Look for consistent revenue compounded annual growth rate (CAGR) above 15–20% and profit CAGR above 20% over the past three to five years. A company whose profits grow faster than revenue is improving efficiency.

Also, check ROE above 15–20% and healthy operating margins. (Margin benchmarks differ by sector, so review industry norms.)

Assess market potential

Companies with large market often make the best growth stocks. Example can be Trent (Zudio). India’s rising middle class population makes a vast market for them.

Check reinvestment strategy

Growth companies invest profits back into growing their businesses.

Evaluate management quality

Strong leadership drives growth. Research the management team's track record, vision and execution capability.

Use stock screeners on brokers website or financial websites to filter stocks by revenue growth, profit growth, ROE and other parameters. Insights from financial news, analyst reports and annual reports can help to identify high-growth sectors and companies.

Growth Stocks vs Value Stocks

Growth stocks focus on future growth with high P/E ratios. They generally have no or low dividends. Their stocks are expected to grow fast and at much higher prices than current price.

Vis-a-vis Value stocks are of established companies trading below their potential value. These stocks offer regular dividends and have lower P/E ratios and more stability.

For example, a traditional bank like SBI (value stock) might trade at a P/E of 12 and pay regular dividends. Alongside, a fintech company (growth stock) might trade at a P/E of 80, pay no dividends but grow profits at 40% annually.

Risks to Understand

Growth stocks also carry certain risks. High valuations mean these stocks are expensive. A small unfavourable event can make prices fall sharply. These stocks are more volatile than stable value stocks. Market corrections impact growth stocks harder because they carry higher expectations.

Most often, competition is intense in high-growth sectors. New competitors can emerge quickly and erode market share and profitability of present day growth stock Regulatory changes, especially in sectors like technology or fintech, can also significantly impact growth.

Disclaimer - The stocks mentioned in this article are provided only as examples for educational purposes and do not constitute investment advice or recommendations. Investors should conduct their own research or consult a financial advisor before making investment decisions.

Growth stocks possess immense growth potential and your investments in them can multiply.But remember, just as growth stocks can quickly multiply your investments, so can they quickly diminish as well. Hence, before investing,performing due diligence and risk assessment is of utmost importance.

About Author

Pradnya Surana

Sub-Editor

is an engineering and management graduate with 12 years of experience in India’s leading banks. With a natural flair for writing and a passion for all things finance, she reinvented herself as a financial writer. Her work reflects her ability to view the industry from both sides of the table, the financial service provider and the consumer. Experience in fast paced consumer facing roles adds depth, clarity and relevance to her writing.