The Tax-Free Savings Account (TFSA) is a popular registered account in Canada due to its tax-sheltered status. If held in a TFSA, any returns earned from qualified investments are exempt from Canada Revenue Agency taxes.
Canadian investors with a high-risk appetite should consider holding quality growth stocks in the TFSA to generate outsized gains over time. In this article, I have identified one quality small-cap TSX stock with a real shot at turning a $2,000 investment into $10,000 by the end of 2030. Let’s see why.
Image source: Getty Images
Is this TSX stock a good buy?
With a market cap of $172 million, Electrovaya (TSX: ELVA) operates in the battery technology segment. With more than 100 patents, Electrovaya delivers battery solutions to enterprises. Its proprietary ceramic separator technology and Infinity Technology provide competitive advantages, offering four times the typical cycle life longevity and enhanced safety features that enable premium product performance.
Operating in a rapidly expanding +$20 billion addressable market, Electrovaya has demonstrated exceptional growth with over 100% organic compound annual growth rate over two years. The company serves more than 12 Fortune 100 customers and is the largest OEM (original equipment manufacturer) partner in the material handling industry.
Electrovaya’s North American footprint includes a 65,000-square-foot engineering facility in Mississauga and a 137,000-square-foot Gigafactory in New York, powered entirely by renewable energy from Niagara Falls.
In the fiscal second quarter (Q2) of 2025 (ended in March), Electrovaya reported revenue of $15 million, an increase of 40% year over year. It also reported a positive net income for the first time and a positive adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) for the eighth consecutive quarter.
Electrovaya secured $51 million in financing from the Export-Import Bank of the United States to expand its gigafactory in New York. This funding reduces capital costs and positions Electrovaya for accelerated growth as cell production begins in mid-2026.
Strong customer momentum continued with over $25 million in new orders during the quarter, driven primarily by material handling applications. The company’s Fortune 100 customers resumed meaningful orders while new verticals, including construction equipment, robotics, and defence applications, showed growing traction.
Notably, Electrovaya secured a second global construction OEM through its Sumitomo Corporation partnership, expanding its Japanese market presence.
Electrovaya maintained healthy gross margins above 30% despite tariff pressures, benefiting from supply chain optimization and increased buying power. Management’s strategic decision to avoid Chinese supply chains for the Jamestown facility proves prescient, given current trade dynamics.
Electrovaya’s diversification strategy is yielding results, with recurring revenue opportunities emerging through Energy-as-a-Service programs and software-enabled battery insights. The battery maker also remains confident in exceeding its $60 million fiscal 2025 revenue guidance.
Is the TSX stock undervalued?
Analysts expect Electrovaya to report adjusted earnings of $0.84 per share in 2029, compared to a loss of $0.04 in fiscal 2024. So, if the TSX stock is priced at 25 times forward earnings, it will trade at around $21 per share in early 2029. It means a $2,000 investment in ELVA stock could grow to roughly $10,000 within four years.
Electrovaya offers significant upside potential to shareholders if it can meet or surpass consensus earnings estimates in the upcoming decade. With profitable operations, secured funding, and expanding market opportunities, Electrovaya is well-positioned for its next growth phase.
