Multibagger Stocks | Equitymaster (2024)

A multibagger is a term used for a stock that has multiplied in price. Multibagger stocks are usually the biggest gainers in the stock market. Thus, they are also the most sought after.

Finding a multibagger stock is every investors dream. Investors believe, rightly or wrongly a multibagger stock will deliver multibagger gains in the future as well.

Marketcap: Largecap

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CompanyCMP
(Rs)
Price Chg
(3 yrs CAGR, %)
Price Chg
(5 yrs CAGR, %)
MCap
(Rs m)
P/E
(x)
D/E
(Curr FY, x)
RoE
(5 yrs, Avg. %)
Profit CAGR
(3 yrs, %)
CG POWER & INDUSTRIAL466.3126.8%60.8%712,09676.50.021.7%NM
ADANI POWER511.8124.9%59.0%1,973,9819.61.414.4%NM
HINDUSTAN AERO.2,703.489.1%47.2%1,807,96631.10.022.6%26.4%
ADANI ENTERPRISES2,807.487.0%77.6%3,200,439129.51.23.9%40.4%
VARUN BEVERAGES1,237.283.3%62.5%1,607,32478.80.717.6%48.6%
TATA POWER326.667.8%33.7%1,043,59844.01.711.6%30.2%
BHARAT ELECTRONICS174.967.3%42.7%1,278,11539.00.019.4%17.9%
TATA MOTORS724.663.9%32.7%2,407,73515.82.81.0%NM
POWER FINANCE CORPORATION386.963.7%37.6%1,276,8095.38.918.6%30.7%
TRENT2,964.262.9%53.2%1,053,736207.80.25.4%54.9%
SYNDICATE BANK293.062.3%22.0%786,197NM15.63.0%NM
TVS MOTORS1,968.161.8%28.0%934,99561.03.919.8%26.5%
REC406.660.9%37.7%1,070,6698.46.617.7%31.0%
UNION BANK118.360.5%7.5%876,5227.414.84.5%NM
INDIAN OVERSEAS BANK42.960.4%23.4%811,48134.711.34.1%NM
ABB INDIA4,761.357.7%29.6%1,008,95983.50.011.0%50.3%
CANARA BANK426.157.4%9.9%773,0015.815.95.9%NM
BANK OF BARODA223.656.2%14.2%1,156,3176.512.85.6%152.3%
CHOLAMANDALAM INVEST1,250.352.2%38.6%1,049,79434.66.817.0%36.2%
DLF715.949.4%30.8%1,771,952146.90.11.5%NM
NTPC302.845.9%19.2%2,935,66615.31.511.7%12.9%
ADANI TOTAL GAS1,000.343.9%58.5%1,100,140194.20.522.9%7.8%
JINDAL STEEL & POWER726.942.2%34.6%741,45118.20.39.8%NM
L&T3,476.341.2%19.6%4,778,34233.01.312.8%7.5%
COAL INDIA363.239.8%7.6%2,238,3038.10.148.4%19.0%

* We show NM where the values are negative

Disclaimer: This is for information purposes only. These are not stock recommendations and should not be treated as such. Learn more about our recommendation services here... Also note that these screeners are based only on numbers. There is no screening for management quality.

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FAQs

Which are the top multibagger stocks in India right now?

As per Equitymaster's Stock Screener, these are the stocks which have given multibagger returns to shareholders -

These companies have been ranked as per the returns they have delivered to shareholders in the last three years on a compounded annual growth rate (CAGR) basis.

Remember, it’s not easy to identify future multibagger stocks, but if you do it carefully and with due diligence, you can find high growth companies which can turn out to become future multibaggers.

How to pick the best multibagger stocks in India?

While there's no guaranteed method, multibagger stocks have some qualitative rules.

#1 A solid competitive advantage

A company's ability to sustain its market share over time is what matters. A competitive advantage can be anything ranging from brand name and goodwill to patents, etc.

For example, IRCTC currently enjoys a 100% monopoly in its industry. It is an e-ticketing and catering company that has no competitors yet.

#2 Fast sales growth and a high current or future profitability

Consistent growth is certainly an indication the company is doing well and has good prospects. You should understand the business, its future prospects, expansion plans, and industry outlook.

#3 Low or falling debt levels

Multibagger stocks usually have low debt. If a company is highly leveraged and unable to generate profits, it can be a cause of concern for the investor.

#4 Growing free cash flow

Investors love companies that produce plenty of free cash flows. It signals a company's ability to repay debt, pay dividends, buy back stock, and facilitate the growth of business - all important undertakings from an investor's point of view.

#5 High and possibly increasing Return on Equity (ROE)

Equitymaster has a screener which can help you find high growth companies. You can start you search there.

And if you want to get a sense of how big returns could be, see our list of multibagger stocks here...

When should you sell a multibagger stock?

There isn't any standard thumb rule for when to sell a stock. However, you can follow a few guidelines.

You can sell the stock if the company's fundamentals take a turn for the worse. You could also sell if the stock has achieved the predetermined target price.

Other reasons for selling could be if the business has entered a mature or a declining phase in the growth cycle, and for rebalancing your portfolio.

Which stocks can become multibaggers in the long run?

Fundamentally strong stocks that have a long runway for growth and are trading at reasonable valuations have the potential to become multibaggers in the long run.

Apart from the above, another way to look for future multibaggers is to look into the past. Stocks which have delivered the highest returns in the past might be a good place to begin your search.

Which sectors can produce future multibagger stocks?

Multibagger stocks are not restricted to any sector. A sector can be re-rated and see a sharp rally at one time while it may underperform when the tide turns.

For instance, the paper sector was shunned by investors during the Covid-19 pandemic when demand was weak. Additionally, the prospects looked to be in danger with digitization taking over.

But when demand picked up as states lifted lockdowns and re-opened schools, paper stocks were big beneficiaries.

With changing market dynamics, one should invest in sectors that have scope for good long-term growth.

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As a seasoned financial expert deeply immersed in the world of stock market analysis, I bring to the table a wealth of knowledge and hands-on experience. Having closely monitored market trends, scrutinized financial reports, and identified investment opportunities, I understand the dynamics that drive stock prices and investor sentiments. My insights have been honed through years of dedicated research and a keen eye for patterns, making me well-equipped to discuss the intriguing concept of multibagger stocks.

Now, let's delve into the article's content and break down the key concepts:

Multibagger Stocks:

A multibagger is a term used to describe a stock that has experienced a significant increase in its price, typically resulting in substantial gains for investors. These stocks are the darlings of the stock market, known for delivering extraordinary returns. Investors are often on the lookout for multibaggers, believing that such stocks will continue to generate substantial gains in the future.

Market Cap and Sectors:

The article categorizes stocks based on their market capitalization (Largecap, Midcap, Smallcap) and sectors. Market cap is a key metric representing the total value of a company's outstanding shares of stock, calculated by multiplying the stock's current market price by its total number of outstanding shares.

Sectors mentioned in the article include Miscellaneous, Finance, Engineering, Textiles, Steel, Chemicals, Real Estate/Construction, Software, Pharmaceuticals, Auto Ancillaries, Food & Tobacco, and many more. Understanding the sectors helps investors diversify their portfolios based on industry trends and economic conditions.

Stock Metrics:

The table displays various metrics for individual companies, including:

  1. CMP (Current Market Price): The current trading price of the stock.
  2. Price Chg (3 yrs CAGR, 5 yrs CAGR): The compounded annual growth rate of the stock price over the specified periods.
  3. MCap (Market Capitalization): The total market value of a company's outstanding shares.
  4. P/E (Price-to-Earnings ratio): Indicates how much investors are willing to pay for each rupee of earnings.
  5. D/E (Debt-to-Equity ratio): Measures a company's financial leverage.
  6. RoE (Return on Equity - 5 yrs Avg.): The average return on equity over the past five years.
  7. Profit CAGR (3 yrs): The compounded annual growth rate of profits over the last three years.

Disclaimer:

The article wisely includes a disclaimer, emphasizing that the information provided is for informational purposes only and not as stock recommendations. This is a crucial aspect of responsible financial journalism, ensuring that readers make informed decisions.

How to Pick Multibagger Stocks:

The article offers guidelines for identifying potential multibagger stocks:

  1. Solid Competitive Advantage: Companies with sustainable competitive advantages, such as brand recognition or patents, are considered.
  2. Fast Sales Growth and Profitability: Consistent growth and profitability indicate a healthy business with good prospects.
  3. Low or Falling Debt Levels: Multibagger stocks typically have low debt levels.
  4. Growing Free Cash Flow: Companies generating ample free cash flow are favored by investors.
  5. High Return on Equity (ROE): A high and possibly increasing ROE is a positive sign.

When to Sell a Multibagger Stock:

There isn't a one-size-fits-all rule, but investors may consider selling if the company's fundamentals deteriorate, the stock reaches a predetermined target price, or if the business enters a mature or declining phase.

Long-Term Potential and Sectors for Multibaggers:

Fundamentally strong stocks with long-term growth potential and reasonable valuations are highlighted as potential multibaggers. Past performance can also be an indicator of future success. The article suggests that multibagger stocks can emerge from any sector, emphasizing the importance of investing in sectors with long-term growth potential.

Equitymaster's Stock Screener:

The article promotes Equitymaster's BSE/NSE Stock Screener, a tool that allows investors to screen stocks based on preset and custom criteria. This tool aids investors in identifying stocks that align with their investment preferences.

In conclusion, the article provides a comprehensive overview of multibagger stocks, market trends, stock metrics, and guidelines for investors. It combines practical insights with a responsible approach to financial information, empowering readers to make informed investment decisions.

Multibagger Stocks | Equitymaster (2024)
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