In this article we will discuss:
– What are multibagger stocks?
– Example of top multibagger stocks from the past decade
– Sectoral distribution of best multibagger stocks from the past
– How to find top multibagger stocks in India
– Characteristics of multibagger shares
– Future multibagger stocks for next 10 years
– List of small cap multibagger stocks for 2021
– List of multibagger penny stocks for 2021
What are multibagger stocks?
Loosely speaking, Multibagger Stocks, or just multibaggers – as they are called in short, refers to stocks whose market capitalisation (or value) has grown by multiple times. So for example, if a stock has doubled its market cap – it will be a two-bagger, tripled – a three bagger, one that’s grown by 10 times will be a ten-bagger, and so on.
MRF for example, gave 1651% returns between June 2001 and April 2018 – it can be referred as a 17-bagger stock.
This phrase was possibly first popularized by legendary American fund manager Peter Lynch. Today however the phrase has turned into a cliché thanks to marketers and new reporters.
MRF for example, gave 1651% returns between June 2001 and April 2018 – it can be referred as a 17-bagger stock.
This phrase was possibly first popularized by legendary American fund manager Peter Lynch. Today however the phrase has turned into a cliché thanks to marketers and new reporters.
Example of multibagger stocks
Below list represent the 20 best multibagger stocks as of end FY20 based on past 10 year returns:
| Symbol | Gain | Sector | Industry |
|---|---|---|---|
| Ajanta Pharma | 5061% | Pharmaceuticals | Formulations |
| Astral Poly | 4614% | Plastic | CPVC Pipes (CB) |
| Atul | 4120% | Chemicals | Dyes & Pigments |
| LaOpala | 3319% | Glass Products | Glass & Glass Products (CB) |
| Aarti Industries | 3127% | Chemicals | Chemicals |
| V-Guard | 2357% | Electrical Equipment | Electrical Equipment |
| Berger Paints | 2268% | Paints & Varnish | Paints Varnish (CB) |
| Vinati Organics | 2034% | Chemicals | Chemicals |
| Eicher Motors | 2017% | Auto | Motorcycles (CB) |
| Page Industries | 1963% | Textile | Apparels (CB) |
| Natco Pharma | 1911% | Pharmaceuticals | Bulk Drug & Form |
| Navin Fluorine | 1770% | Chemicals | Chemicals |
| Cera Sanitaryware | 1675% | Ceramics | Sanitaryware (CB) |
| Can Fin Homes | 1643% | Finance | HFC |
| Abbott India | 1593% | Pharmaceuticals | MNC |
| SRF | 1448% | Technical Textile | Manmade |
| Granules India | 1382% | Pharmaceuticals | Bulk Drug |
| Britannia Industries | 1363% | FMCG | Food Processing (CB) |
| Bajaj Finserv | 1244% | Finance | Finance & Investments |
1 Lakh invested in Ajanta Pharma in 2010 is worth more than half a crore today. Properly investing in just a few multibagger stocks can be life changing.
Past Multibagger stocks by sector
If we expand the list to 50 top multibagger stocks, then we get the following sectoral distribution:
Sectors contributing to largest number of multibagger stocks in the past decade included Chemicals, Pharmaceuticals and Autos.
Additionally, around 40% of these businesses represent strong consumer brands (marked CB in the table).
It is quite likely that good number of next multibagger stocks will come from the same space.
Additionally, around 40% of these businesses represent strong consumer brands (marked CB in the table).
It is quite likely that good number of next multibagger stocks will come from the same space.
Characteristics of top multibagger shares
Multibagger shares usually have the following traits:
How to spot potential multibagger stocks
The usual starting point is to screen the traded stock universe by applying filters in-line with the criteria mentioned above. This will give us an initial list, which can be digged in further.
So, we look for a highly profitable business with strong cash-flows and low debt, that is maintaining a consistent but high growth rate. We translate these attributes into the filter represented below:
So, we look for a highly profitable business with strong cash-flows and low debt, that is maintaining a consistent but high growth rate. We translate these attributes into the filter represented below:
Future multibagger stocks for next 10 years
Running the above screen, we get a list of 18 potential multibagger stocks. These stocks could potentially generate strong returns in future:
| Name | P/E | M-cap Rs. Cr. | PAT Var 10Yrs | CMP/ Sales | ROE% | FCF 5Yrs Rs. Cr. |
|---|---|---|---|---|---|---|
| Chamanlal Setia | 6.45 | 458.1 | 22.29 | 0.55 | 20.99 | 1.46 |
| Ganesh Benzopl. | 6.57 | 333.6 | 19.17 | 1.45 | 31.93 | 112.27 |
| Sh. Jagdamba Pol | 9.23 | 261.34 | 37.4 | 1.36 | 34.66 | 25.5 |
| IOL Chemicals | 9.48 | 3825.85 | 43.06 | 2.05 | 56.93 | 728.4 |
| Assoc.Alcohols | 10.44 | 442.49 | 45.51 | 0.98 | 29.15 | 71.89 |
| Transpek Inds. | 13.32 | 977 | 30.68 | 1.85 | 22.58 | 79.45 |
| Avanti Feeds | 16.27 | 6521.4 | 78.38 | 1.64 | 29.07 | 694.32 |
| Oriental Aromat. | 18.21 | 1552.56 | 23.55 | 2.42 | 20.29 | 166.18 |
| Axtel Industries | 22.17 | 374.39 | 32.3 | 3.31 | 20.25 | 37.69 |
| Bharat Rasayan | 22.49 | 3644.18 | 39.3 | 3.19 | 32.91 | 136.06 |
| Atul | 29.41 | 17795.34 | 27.78 | 4.85 | 22.59 | 1126.4 |
| Alkyl Amines | 29.61 | 6138.29 | 34.09 | 6.32 | 41.99 | 217.63 |
| Tata Elxsi | 31.32 | 9561.62 | 18.46 | 5.65 | 25.65 | 804.2 |
| KMC Speciality | 32.67 | 313.97 | 28.34 | 3.41 | 26.17 | 27.17 |
| Britannia Inds. | 46.89 | 83493.45 | 27.63 | 6.58 | 32.49 | 3624.36 |
| HLE Glascoat | 47.15 | 1846.11 | 31.88 | 4.89 | 52.6 | 57.73 |
| Abbott India | 51.48 | 33788.67 | 22.55 | 8.13 | 26.73 | 1806.89 |
| GMM Pfaudler | 64.81 | 5100.34 | 22.95 | 8.12 | 23.51 | 68.01 |
List of smallcap multibagger stocks for 2021
In order to get get a list of smallcap multibagger stocks (potential), we filter the above list further by market capitalization, setting the maximum market cap at 8500 crores for smallcap stocks. Sorting the list further by relative value, produces the top 5 stocks as below:
Shri Jagdamba Polymers Ltd
Shri Jagdamba Polymers Ltd. is based in Ahmedabad, India. The company has an installed capacity of 1000 MT per month to process woven polypropylene/polyethylene fabrics on both circular as well as sulzer looms. More than 80% of production is exported to the USA, Europe and several other countries.
Product range includes PP Woven Bags, FIBC, Box Bags, Silt-fence, Ground Cover, Fabrics, Geotextile, Lumber Cover, etc.
The company has targeted to double its capacity to 2000 MT per month in next five years by installing higher end products to cover several other areas of the global market. Plans have also been laid to put up captive wind power generation. As a part of backward integration plans are being finalized to put up in-house additive unit and machinery workshop.
Product range includes PP Woven Bags, FIBC, Box Bags, Silt-fence, Ground Cover, Fabrics, Geotextile, Lumber Cover, etc.
The company has targeted to double its capacity to 2000 MT per month in next five years by installing higher end products to cover several other areas of the global market. Plans have also been laid to put up captive wind power generation. As a part of backward integration plans are being finalized to put up in-house additive unit and machinery workshop.
IOL Chemicals and Pharmaceuticals Ltd
IOL Chemicals and Pharmaceuticals Limited is a pharmaceutical company. The Company is engaged in manufacturing and selling of organic chemicals and bulk drugs. It caters to both domestic and international markets. It operates through two segments: Chemicals and Drugs.
The Chemicals segment produces and sells acetic anhydride, acetyl chloride, mono chloro acetic acid and iso butyl benzene. Its Specialty Industrial Organic Chemicals division produces ethyl acetate from organic alcohol for use in a range of end products in markets, such as flexible packaging, pharmaceuticals, food processing, pesticides and paint industries.
Its APIs division includes manufacturing of Bulk Drugs, such as anti-inflammatory and anti-diabetic.
The Drugs segment produces and sells various active pharmaceutical ingredients (APIs), such as ibuprofen and metformin.
Its manufacturing facility is located in Barnala, Punjab.
The Chemicals segment produces and sells acetic anhydride, acetyl chloride, mono chloro acetic acid and iso butyl benzene. Its Specialty Industrial Organic Chemicals division produces ethyl acetate from organic alcohol for use in a range of end products in markets, such as flexible packaging, pharmaceuticals, food processing, pesticides and paint industries.
Its APIs division includes manufacturing of Bulk Drugs, such as anti-inflammatory and anti-diabetic.
The Drugs segment produces and sells various active pharmaceutical ingredients (APIs), such as ibuprofen and metformin.
Its manufacturing facility is located in Barnala, Punjab.
Associated Alcohols & Breweries Ltd
Associated Alcohols & Breweries Limited is a distillery company. The Company is engaged in the manufacture of alcoholic liquor. It operates through Potable Alcohol segment. It is also engaged in the business of bottling vodka and Scotch whisky for international brands.
It has presence in all varieties of potable alcohols, country liquor (CL), rectified spirits (RS), extra neutral alcohol (ENA), distilled grain spirit, Indian made foreign liquor (IMFL) in the whisky, brandy, rum, gin and vodka categories, and bottling scotch whisky for other international brands.
It manufactures and markets in house brands, such as Red & White, James McGill, Bombay Special (in the whisky segment), London Bridge (in the gin segment) and Jamaican Magic in the rum category.
Its licensed brands include Smimoff Vodka, Captain Morgan rum, HAIG Scotch whisky, Masterstroke whisky, Glen Drummond single malt Scotch whisky and Royal Crown whisky. It has a production capacity of 42 million liters per annum.
It has presence in all varieties of potable alcohols, country liquor (CL), rectified spirits (RS), extra neutral alcohol (ENA), distilled grain spirit, Indian made foreign liquor (IMFL) in the whisky, brandy, rum, gin and vodka categories, and bottling scotch whisky for other international brands.
It manufactures and markets in house brands, such as Red & White, James McGill, Bombay Special (in the whisky segment), London Bridge (in the gin segment) and Jamaican Magic in the rum category.
Its licensed brands include Smimoff Vodka, Captain Morgan rum, HAIG Scotch whisky, Masterstroke whisky, Glen Drummond single malt Scotch whisky and Royal Crown whisky. It has a production capacity of 42 million liters per annum.
Transpek Industry Ltd
Transpek Industry is engaged into the manufacturing and export of a range of chemicals servicing the requirements of customers from a diverse range of industries – Textiles, Pharmaceuticals, Agrochemicals, Advanced Polymers, etc.
The Company manufactures various chemical products, such as anti-knock preparations, anti-freeze preparations, liquids for hydraulic transmission, composite diagnostic or laboratory reagents, writing or drawing ink, chemical substance used in manufacturing of pesticides and other chemical product.
The Company also manufactures organic and inorganic chemical compounds. Its organic products include Tri Ethylene Glycol Dichloride, Cetyl Chloride, Pivaloyl Chloride and Terephthaloyl Chloride. Its inorganic products include Thionyl Chloride, Sulphur Monochloride, Sulphur Trioxide and Chloro Sulphonic Acid. The Company’s products are used in various applications, such as polymers, plastics, performance materials, agrochemicals, coatings, pharmaceuticals, personal care, flavors and fragrance.
The Company manufactures various chemical products, such as anti-knock preparations, anti-freeze preparations, liquids for hydraulic transmission, composite diagnostic or laboratory reagents, writing or drawing ink, chemical substance used in manufacturing of pesticides and other chemical product.
The Company also manufactures organic and inorganic chemical compounds. Its organic products include Tri Ethylene Glycol Dichloride, Cetyl Chloride, Pivaloyl Chloride and Terephthaloyl Chloride. Its inorganic products include Thionyl Chloride, Sulphur Monochloride, Sulphur Trioxide and Chloro Sulphonic Acid. The Company’s products are used in various applications, such as polymers, plastics, performance materials, agrochemicals, coatings, pharmaceuticals, personal care, flavors and fragrance.
Avanti Feeds Ltd
Avanti Feeds Limited is a manufacturer of prawn and fish feeds, and shrimp processor and exporter. The Company’s principal products/services are shrimp feed and processed shrimp. Its segments are Shrimp Feed and Wind Mills.
Company manufactures shrimp feed and markets it to farmers, which is used in aqua culture to grow shrimp. Shrimp are purchased from the farmers and are further processed and exported to various countries. The Company has over three prawn and a fish feed manufacturing units in Kovvur, Vemuluru in West Godavari District, Andhra Pradesh, and Pardi in Valsad District, Gujarat, in India. Its shrimp processing and exports unit is located in Gopalapuram, East Godavari District, Andhra Pradesh.
Company has also installed over four wind mills of over 3.2 megawatts capacity at Chitradurga, Karnataka. Power generated from wind mills is sold to Bangalore Electricity Supply Company Limited (BESCOM) under power purchase agreement.
Company manufactures shrimp feed and markets it to farmers, which is used in aqua culture to grow shrimp. Shrimp are purchased from the farmers and are further processed and exported to various countries. The Company has over three prawn and a fish feed manufacturing units in Kovvur, Vemuluru in West Godavari District, Andhra Pradesh, and Pardi in Valsad District, Gujarat, in India. Its shrimp processing and exports unit is located in Gopalapuram, East Godavari District, Andhra Pradesh.
Company has also installed over four wind mills of over 3.2 megawatts capacity at Chitradurga, Karnataka. Power generated from wind mills is sold to Bangalore Electricity Supply Company Limited (BESCOM) under power purchase agreement.
List of multibagger penny stocks for 2021
In US, stocks below one dollar (roughly 75 Indian rupees in todays date) are referred to as penny stocks. In the context of Indian markets, considering 100 rupees as the cut-off for penny stocks, the following stocks can be considered as potential multibagger penny stocks:
Chaman Lal Setia Exports Ltd.
Chaman Lal Setia Exports Ltd. is an India-based manufacturer and exporter of basmati rice. The Company also offers non-basmati rice, such as Sugandha, Sharbati, Prll and Sona Massouri. The Company’s diverse product line covers products, such as Sella Rice, Bhatti Sella, Rice for Diabetic peoples, Smoked rice and Pesticide Residue free rice.
In the international market, the Company is exporting rice to over 70 countries across the world in the Maharani brand or under the private labels of the customers. Its Maharani Product range includes Basmati Rice 1121, Maharani Basmati Rice, Royal Basmati Rice and Supreme Basmati Rice.
Its basmati product range includes Mithas Basmati Rice, Begum Basmati Rice and Nezzah Indian Basmati Rice. The Company also offers private labeling to all its customers.
In the international market, the Company is exporting rice to over 70 countries across the world in the Maharani brand or under the private labels of the customers. Its Maharani Product range includes Basmati Rice 1121, Maharani Basmati Rice, Royal Basmati Rice and Supreme Basmati Rice.
Its basmati product range includes Mithas Basmati Rice, Begum Basmati Rice and Nezzah Indian Basmati Rice. The Company also offers private labeling to all its customers.
Ganesh Benzoplast Ltd
Ganesh Benzoplast Limited is engaged in the manufacture, export and import of a range of specialty chemicals, food preservatives and industrial lubricants. The Company also provides conditioned storage facilities for bulk liquids and chemicals at various ports in India.
Its segments include Chemical Division and Liquid Storage Terminal (LST) Division. Its LST division provides storage tanks which are leased on rent for storing liquid chemicals, oil products, petrochemicals, molasses and edible oils, among others. The Company’s Chemical Division processes a range of food preservatives, lubricants and active pharmaceutical ingredient (API) drugs.
Its range includes Sodium Benzoate, Food Preservatives, Lubricant Additives, Lubricant Components and API/Bulk Drugs, among others. The Chemical division manufactures over 70 products. Its products and services include storage facilities and cargo handling, and manufacturing of organic and inorganic chemicals.
Its segments include Chemical Division and Liquid Storage Terminal (LST) Division. Its LST division provides storage tanks which are leased on rent for storing liquid chemicals, oil products, petrochemicals, molasses and edible oils, among others. The Company’s Chemical Division processes a range of food preservatives, lubricants and active pharmaceutical ingredient (API) drugs.
Its range includes Sodium Benzoate, Food Preservatives, Lubricant Additives, Lubricant Components and API/Bulk Drugs, among others. The Chemical division manufactures over 70 products. Its products and services include storage facilities and cargo handling, and manufacturing of organic and inorganic chemicals.
KMC Speciality Hospitals Ltd
KMC Speciality Hospitals (India) is a healthcare services and pharmacy company. The Company is engaged in providing medical and healthcare services. It is a part of the KMC group of hospitals based at Tiruchirappalli.
The company is in the business of running a super speciality hospital having 175 beds with team of dedicated specialists. They provide quality healthcare to patients in key specialty areas such as Neurosurgery, Cardiovascular & thoracic surgery, Orthopedics, Plastic and Reconstructive Surgery, Gynecology, Neonatology and Nephrology (including renal transplants).
The company provides comprehensive general healthcare to patients in their local communities and in the surrounding areas. They have the state-of-the-art equipments and trained personnel required for managing critically ill patients.
The company is in the business of running a super speciality hospital having 175 beds with team of dedicated specialists. They provide quality healthcare to patients in key specialty areas such as Neurosurgery, Cardiovascular & thoracic surgery, Orthopedics, Plastic and Reconstructive Surgery, Gynecology, Neonatology and Nephrology (including renal transplants).
The company provides comprehensive general healthcare to patients in their local communities and in the surrounding areas. They have the state-of-the-art equipments and trained personnel required for managing critically ill patients.
Conclusion
For most individuals, ability to spot and invest properly in one or two multibagger stocks is enough to change fortunes for a lifetime.
Depressed markets change the odds for spotting multibaggers in favour of the investor. As markets try to come out of the shadows of pandemic, this may be a good time to take concentrated bets in a few handpicked businesses, and create a diversified portfolio quality stocks for long term wealth creation.
In this article, we discussed potential multibagger stocks that could be considered for investing now. This note may not be considered as financial advice. Please do your own research or subscribe to our advisory service for formal advice.
Credits
Graphic credits – screener.in
Company overview credits – Reuters
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