Introduction
The Indian stock market presents vast opportunities for investors, with several low-priced stocks offering great growth potential. The current price of stocks under Rs 100 provides essential information for making investment decisions, highlighting whether a stock is trading at a discount or a fair price relative to its growth potential. Many investors, especially those just beginning their investment journey, look for affordable stocks to diversify their portfolios. Stocks priced under Rs 100 often attract attention due to their low entry cost and potential for significant returns, particularly for long-term investors. In this blog, we’ll explore the best stocks under 100, focusing on their 5-year CAGR (Compound Annual Growth Rate) to determine their potential for growth in 2025.
Whether you’re interested in the best stocks under 10, penny stocks under 50 rupees, or the government stocks list under 100, this guide will help you find the best opportunities in India’s thriving stock market.
Low-Priced Growth Stocks in India
Stocks priced under Rs 100 are often considered an attractive option for retail investors looking to enter the market with a smaller investment. While low-priced stocks can be risky due to volatility, they also offer significant upside potential. Investors are always on the lookout for low-priced stocks to buy that can generate impressive returns, especially when purchased at the right time. Therefore, it is crucial to make informed decisions when you buy stock, considering factors like the stock’s performance and potential returns compared to other recommended investments.
Understanding 5-Year CAGR and Past Performance in Stock Investment
Before diving into specific stocks, it’s important to have a solid understanding of Compound Annual Growth Rate (CAGR), especially when evaluating the performance of stocks over time. The CAGR is a powerful tool for assessing the average rate of return that an investment has earned annually over a specified period, assuming the profits are reinvested at the end of each period. It allows investors to compare the growth rates of different investments, regardless of their volatility or fluctuations.
In simple terms, CAGR gives you a consistent measure of how much an investment has grown over a specific time frame, providing a smoother growth rate. It helps investors assess the effectiveness of their investments more accurately and realistically, without being misled by short-term fluctuations. Additionally, CAGR is useful for comparing the average return of different investments, helping investors to see which options have performed better over time.
Past Performance in Stock Investment
For example, consider a stock priced under Rs 100 that has shown significant price volatility. While the stock may have experienced ups and downs, the CAGR smoothens out these fluctuations to provide a clearer picture of its long-term growth. This helps investors better understand whether the stock has delivered consistent returns over the past five years, even though it may have faced short-term market challenges. This is crucial because, without factoring in CAGR, investors could easily be influenced by short-term price changes that don’t reflect the true potential of the stock.
When evaluating stocks under Rs 100, looking at the CAGR over 5 years is essential because it highlights the stock’s overall growth trajectory, rather than focusing on individual price spikes or drops. Stocks may appear attractive in the short term due to sharp increases, but if they don’t maintain a positive CAGR, they could be subject to periods of underperformance. A positive 5-year CAGR indicates that the stock has consistently grown over the long term, making it a potentially strong candidate for investors looking for stable, long-term capital appreciation.
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Top Stocks Under Rs 100 with High 5-Year CAGR
When evaluating stocks under Rs 100, investors should pay close attention to the 5-year CAGR, as it reflects the consistent growth of a stock over time. These stocks are considered growth stocks due to their potential for significant returns. Below are some stocks under Rs 100 that have demonstrated strong performance in terms of CAGR:
1. Punjab National Bank
Sector: Financial Services
Market Cap: ₹1,10,597 Cr.
5-Year CAGR: 25.85%
About: Punjab National Bank (PNB), India’s first Swadeshi Bank, is a government-owned banking and financial services institution headquartered in New Delhi. It is the second-largest public sector bank after SBI.
Pros:
- Trading at 0.84 times its book value.
- Strong profit growth of 24.2% CAGR over the last 5 years.
- Healthy dividend payout of 19.2%.
- Significant improvement in working capital, reducing from 61.2 days to 26.3 days.
- Revenue growth has positively influenced profitability and future earnings.
2. IDBI Bank Ltd
Sector: Financial Services
Market Cap: ₹83,815 Cr.
5-Year CAGR: 32.12%
About: IDBI Bank specialises in the monetary intermediation of commercial, savings, and postal savings banks, as well as discount houses.
Pros:
- Delivered strong profit growth of 19.0% CAGR over the last 5 years.
- Healthy dividend payout of 19.0%.
- Promising future potential, though investors should carefully assess risks and rewards. Ors should consider both the risks and rewards and conduct their due diligence.
3. NHPC Ltd
Sector: Utilities – Renewable Energy
Market Cap: ₹82,460 Cr.
5-Year CAGR: 33.41%
About: NHPC, a Mini Ratna category I company, is India’s leading hydroelectric generation company, involved in generating and selling bulk power to various power utilities. The company also offers project management, consultancy, and power trading services.
Pros:
- Maintains an impressive dividend payout of 50.6%.
- Reduced working capital requirements from 84.4 days to 29.5 days.
- Strong growth prospects with potential for substantial returns.
4. Canara Bank
Sector: Financial Services
Market Cap: ₹81,618 Cr.
5-Year CAGR: 37.60%
About: Canara Bank, merged with Syndicate Bank in FY21, was founded in 1906 and nationalised in 1969. It is headquartered in Bangalore and is one of the leading commercial banks in India.
Pros:
- Trading at 0.78 times its book value.
- Offers a solid dividend yield of 3.51%.
- Outstanding profit growth of 90.8% CAGR over the last 5 years.
- Consistently maintains a healthy dividend payout of 19.2%.
- Strong growth potential, reflected in current stock performance.
5. Suzlon Energy Ltd
Sector: Renewable Energy
Market Cap: ₹75,556 Cr.
5-Year CAGR: 98.47%
About: Suzlon is a global leader in renewable energy solutions, focusing on the manufacture and installation of wind turbine generators (WTGs). The company also provides project planning, execution services, and operations and maintenance for wind power projects worldwide.
Pros:
- Significantly reduced its debt and is nearly debt-free.
- Strong future performance expected, with promising quarterly results.
- Demonstrated solid profit growth of 19.7% CAGR over the past 5 years.
- Among the leading growth stocks with substantial price increases.
Best Stocks Under Rs 10 for High Growth and Returns
Many investors look for the best stocks under 10 as an opportunity to buy shares at a low price, hoping for high returns. While stocks in this category are often considered more volatile, they can offer significant rewards if selected wisely. These stocks are often considered ‘growth stock’ due to their potential for long-term investment. Here are some stocks under Rs 10 that have the potential for high returns:
1. Salasar Techno Engineering Ltd
Sector: Industrial Consumables
Market Cap: ₹ 1,634 Cr.
5 Year CAGR: 66.37%
About: Established in 2006 as a tower manufacturer, Salasar Engineering Limited, has emerged as a fast-growing Steel structure manufacturer & EPC infrastructure company, providing services across telecom, energy and railways sector.
2. Rama Steel Tubes Ltd
Sector: Steel Manufacturing
Market Cap: ₹ 1,525 Cr.
5 Year CAGR: 105.23%
About: Incorporated in 1974, Rama Steel Tubes is one of the leading manufacturers of Steel Pipes & Tubes, Rigid PVC & GI pipes, and square section products in India.
Pros
- The company has reduced debt.
- The company has delivered good profit growth of 28.3% CAGR over the last 5 years.
Government Stocks List Under Rs 100
Government stocks, or stocks of public sector undertakings (PSUs), have always been a popular investment choice due to their stability and long-term growth potential. Wall Street analysts view these government stocks as stable investment options. Some of the best government stocks under 100 include:
1. NHPC Ltd
Sector: Utilities – Renewable Energy
Market Cap: ₹82,460 Cr.
5-Year CAGR: 33.41%
About: NHPC, a Mini Ratna category I company, is India’s leading hydroelectric generation company, involved in generating and selling bulk power to various power utilities. The company also offers project management, consultancy, and power trading services.
Pros:
- Maintains an impressive dividend payout of 50.6%.
- Reduced working capital requirements from 84.4 days to 29.5 days.
- Strong growth prospects with potential for substantial returns.
2. NMDC Ltd
Sector: Mining & Minerals
Market Cap: ₹ 61,349 Cr.
5 Year CAGR: 9.46%
About: NMDC is engaged in the exploration and production of Iron Ore along with Diamond, production and sale of Sponge Iron, and generation and sale of Wind Power.
Pros
- The company has a good return on equity (ROE) track record: 3 Years ROE 29.0%.
- The company has been maintaining a healthy dividend payout of 39.5%.
These government stocks listed under 100 provide a safe and stable investment option for conservative investors.
Penny Stocks Under Rs 50
Investing in penny stocks under 50 Rs can be a lucrative strategy for those willing to take higher risks. These stocks are usually associated with small-cap companies or those facing challenges. However, they also offer the possibility of substantial growth if the companies improve their performance. It is important to note that the past performance of these stocks does not guarantee future success, and careful analysis is necessary. Here are a few penny stocks under 50 Rs to watch out for:
1. Indian Overseas Bank
Sector: : Financial Services
Market Cap: ₹ 72,597 Cr.
5 Year CAGR: 39.84%
About: Indian Overseas Bank was founded in 1937 by Chidambaram Chettyar. It was one of the 14 major banks that were nationalised in 1969.
Pros
- The company has delivered good profit growth of 21.9% CAGR over the last 5 years.
These penny stocks under 50 Rs have the potential to surprise investors with high returns, especially in the right market conditions.
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Why Shares Under Rs 100 Are Attractive to Retail Investors
Shares priced under Rs 100 are particularly attractive to retail investors because of their low entry cost. With smaller amounts of capital, investors can build a diversified portfolio by buying shares of different companies at lower prices. Additionally, organisations like Motley Fool provide valuable investment recommendations for shares under Rs 100. Shares under 100 Rs often show strong volatility, providing an opportunity for traders to take advantage of short-term price movements. However, it is essential to conduct thorough research and consider the long-term prospects of the company before making investment decisions.
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Factors to Consider When Investing in Stocks Under Rs 100
Investing in stocks under Rs 100 requires careful analysis. Here are a few key factors to consider:
Company Fundamentals:
A company’s financial health is critical to its long-term success. To assess the company fundamentals, start by evaluating its revenue growth over the past few years. Consistent revenue growth indicates a company’s ability to expand its business and attract customers. Additionally, profitability is a key indicator of financial stability. You want to invest in companies that are generating profits consistently, as this shows effective management and operational efficiency. Companies with low debt levels are generally more stable and less susceptible to economic downturns, as they are not overly reliant on borrowing. Assessing financial ratios such as debt-to-equity, net profit margin, and return on equity can provide a deeper insight into the company’s financial position.
Sector Growth Potential:
The sector in which a company operates plays a crucial role in determining its growth trajectory. For stocks under Rs 100, it’s important to focus on sectors with high growth potential. Technology, pharmaceuticals, and infrastructure are some of the most promising sectors in India. The technology sector is driven by innovations in digital transformation, artificial intelligence, and software solutions, and it is expected to continue growing as businesses and governments adopt these technologies. Pharmaceuticals is a robust sector in India, with increasing demand for healthcare services and India’s strong position as a global leader in generic drug manufacturing. The infrastructure sector, particularly related to government initiatives for improving urban development, roads, and transportation, also offers high growth prospects. By investing in sectors with strong future potential, investors can increase the likelihood of higher returns as these industries expand.
Management Quality:
The leadership of a company plays a significant role in its success or failure. Management quality can be assessed by researching the company’s top executives and their track record in executing strategies, driving growth, and adapting to market changes. A strong management team makes informed, ethical decisions, has a clear strategic vision, and consistently delivers on its promises. You should look into the management’s experience in the industry, their past achievements, and how well they’ve navigated challenges such as economic downturns, competition, and industry disruptions. A company led by a skilled and visionary management team is more likely to be resilient, innovative, and capable of sustaining growth in the long term.
Market Conditions:
Broader market conditions can greatly influence the performance of individual stocks. Factors such as interest rates, inflation, and government policies can impact the performance of a stock, especially those in sectors that are sensitive to economic cycles. For example, when interest rates are high, borrowing costs for companies increase, which can negatively affect their profitability, especially for those with high debt levels. Inflation can erode purchasing power and increase the cost of raw materials, impacting companies’ margins. Government policies such as tax incentives, subsidies, or regulations can have a direct impact on the profitability of certain sectors. For instance, favourable government policies in renewable energy can boost solar and wind energy companies, while stricter regulations on healthcare prices can impact pharmaceutical companies. Understanding these macroeconomic conditions will help you assess the external risks and opportunities that could affect your stocks under Rs 100.
Conclusion
Investing in stocks under Rs 100 offers significant opportunities for retail investors, particularly those seeking to diversify their portfolios without a hefty capital outlay. From penny stocks under 50 Rs to established government stocks under Rs 100, there are numerous opportunities to explore for long-term growth. By focusing on stocks with strong 5-year CAGR, robust company fundamentals, and high sector growth potential, investors can position themselves for consistent returns.
Considering the impressive stock advisor returns can also guide investors in making informed decisions, as these returns highlight the success of expert recommendations in yielding significant gains.
However, it’s crucial to carefully evaluate the management quality and market conditions that could impact stock performance. A combination of these factors will help you make more informed investment decisions.
At Jainam Broking Ltd., we aim to guide investors in navigating the dynamic world of low-priced stocks, offering insights, research, and personalised strategies tailored to your investment goals. With a team of experts, Jainam Broking Ltd. is committed to providing the right tools to help you make well-informed choices in the Indian stock market, ensuring your portfolio is built for both growth and stability.
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