I'd buy these great ASX growth shares in March

Growth stocks could achieve strong returns.

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ASX growth shares can be some of the best performers because of how they can compound revenue and profit over the long term.

If businesses are growing in scale, they have a much better opportunity to deliver good returns for shareholders. Dividends are certainly not necessary for ASX growth shares, but a growing dividend can be an added benefit.

These are two that I like the look of at the current price.

Corporate Travel Management Ltd (ASX: CTD)

Corporate Travel is one of the largest businesses in its sector. However, the ASX travel share recently saw its share price sink by 20% after reporting its FY24 first-half results.

The numbers it reported were impressive – revenue rose 25% to $363.7 million, underlying earnings before interest, tax, depreciation and amortisation (EBITDA) soared 96% to $100.7 million, and statutory net profit after tax (NPAT) rocketed 222% higher. The dividend increased 183% to 17 cents per share.

But the ASX growth share reported that macro issues had impacted its short-term performance, including negative travel sentiment relating to conflict in the Middle East, travel budgets being fully used up in the first quarter due to high ticket prices, and a slower China outbound recovery.

However, the business has a five-year strategy to double its FY24 profit organically by FY29, with acquisitions being a bonus. This is an exciting outlook in my mind.

According to Commsec, the Corporate Travel share price is valued at just 13.5x FY26's estimated earnings. I think this is cheap for a business that could be growing strongly in FY25 and beyond.

Xero Limited (ASX: XRO)

Xero is a leading ASX tech share – it provides cloud accounting software to small and medium businesses in many countries. Australia, New Zealand and the UK are three of the most important markets for the company.

The FY24 first-half result was a perfect example of what's happening positively for the business.

It saw total subscribers increase by 13% to 3.9 million, and the average revenue per user (ARPU) rose 6% following price increases in those three key markets. This led to operating revenue growing by 21% to NZ$800 million and the total lifetime value of subscribers rising by 14% to $14.8 billion.

One of the most appealing things to me about the ASX growth share is that profitability is increasing. In HY24, Xero's gross profit improved to 87.5%, up from 87%. The adjusted EBITDA jumped 65% to NZ$204.5 million, net profit increased NZ$70 million to NZ$54 million, and free cash flow jumped NZ$91 million to $106.7 million.

As the company adds more (and typically loyal) subscribers, its revenue can keep growing, and this will lead to increasing operating leverage.

I think profit can rise rapidly for the foreseeable future, which may excite investors.

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Corporate Travel Management and Xero. The Motley Fool Australia has positions in and has recommended Xero. The Motley Fool Australia has recommended Corporate Travel Management. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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