S&P/ASX 300 Index (ASX: XKO) growth shares can deliver great returns. Buying a business before it reaches its full potential allows us to join it for the ride to becoming a much bigger company.
Over the long-term, I think it's businesses that are growing quickly and delivering rising profit margins that will end up achieving big returns over five or ten years.
The two ASX 300 growth shares I'm going to talk about are two I've backed with my own money and I'm planning to invest in again at the current valuations. If I had $5,000 to invest, I'd be very happy to put it to work in the following stocks.
Tuas Ltd (ASX: TUA)
Tuas is a Singapore-based telecommunications business that was spun off from TPG Telecom Ltd (ASX: TPG).
The company has already become a sizeable player in the market, reaching more than 1 million mobile subscribers in the country. In its FY25 half-year result, the company reported that mobile subscribers grew 23.7% to 1.16 million.
Excitingly, the business is also starting to expand into the home broadband market as well. It added around 11,000 broadband subscribers during the HY25 six-month period to reach 14,347 active broadband services. This could become a useful earnings pillar in the coming years.
The strong subscriber growth is translating into excellent revenue growth with the ASX 300 growth share delivering 33.8% year-over-year revenue growth in HY25.
One of the most exciting aspects of the company's future is how its profit margins are increasing. Investors usually value a business ultimately on its profit generation. In the HY24 result it had an operating profit (EBITDA) margin of 41% and this increased to 45.2% in HY25. I'm hopeful of further profit margin growth as the business grows even further in Singapore and perhaps expands to other Asian countries.
Guzman Y Gomez Ltd (ASX: GYG)
GYG is a fast-growing Mexican food business with over 200 locations across Australia. It has a long-term aspiration to reach 1,000 over the next couple of decades. There are also a small number of Guzman Y Gomez restaurants in Japan, Singapore and the US.
When I look for compelling ASX 300 growth shares, I want to see that customers are loving the product and that the business has plans to reach more customers.
In the FY25 third-quarter update, the comparable sales of GYG's sales in Australian, Japanese and Singaporean restaurant networks grew by a combined 11%. That's a great sign that customers are loving what GYG has to offer.
The business is also growing its number of restaurants, with plans to open 40 annually in Australia in the medium term. The additional restaurants are helping the business grow its total network sales significantly – in the FY25 third-quarter result, total network sales increased by 23.6%.
GYG is also seeing pleasing margin growth as more sales are achieved. The GYG restaurant margin was 18.6% in FY20 and this grew to 21.8% in HY25.
The broker UBS is predicting that GYG's revenue could go from $446 million in FY25 to $989 million in FY29. This could come with rising profitability as it continues to expand. I'm excited by how far this ASX 300 growth share preforms over the next five years.
