A multibagger stock is an equity share that generates returns significantly exceeding its initial investment cost. This means the stock’s value multiplies several times over a period. These stocks typically belong to companies with high growth potential, strong fundamentals, and effective management. However, knowing how to find multibagger stocks in advance is challenging and involves a high degree of risk. It demands research, patience, and a thorough understanding of these stocks and the stock market.
What are Multibagger Stocks?
Multibagger stocks are shares of companies with the potential to increase in value many times over their current price. These multibagger stocks can provide returns five or more times the initial investment, making them an attractive option for investors.
Why Invest in Multibagger Stocks?
The potential for exponential returns is an undeniable reason to consider multi-bagger stocks. Imagine investing a small amount and witnessing it build into a significant sum—that’s the power these multibagger stocks hold.
Tips to Identify Future Multibagger Stocks
The Indian stock market has a long history of creating multibagger share with extraordinary returns. While finding them early on can be challenging, a mindful approach and a keen understanding of the market can improve your chances of success. Along with relying on the knowledge and strategic expertise of reputable financial advisors’ equity market guidance, you can do your own research:
1. Riding Industry Trends: Look for exponential growth sectors, like renewable energy or e-commerce. Companies at the forefront of these sectors have a higher chance of becoming booming and being considered good multibagger stocks.
2. Scrutinize Financials: Analyze the company’s financials, including revenue growth, profitability, and debt levels. Look for companies with solid fundamentals and a sustainable competitive advantage.
3. Management Matters: A visionary and competent management team is important for a company’s long-term success. Research the management team’s track record and ability to steer the company towards growth.
4. Valuation Considerations: Avoid overpaying for potential. Look for companies with reasonable valuations compared to their future growth prospects.
10 Multibagger Stocks to Buy in 2024
Bharti Airtel
| Market Cap₹8,88,874 Cr | Stock Price 22 Aug ’24₹1,486 | Sales (2024)₹149,982 Cr | Net Profit (2024)₹8,558 | CAGR (1 year)71% | PE Ratio74.4 |
Data sourced from Screener, as of 22 August 2024
Bharti Airtel is one of the leading telecommunications companies in India, with a strong presence across South Asia and Africa. The company offers a wide range of services, including mobile voice and data, fixed-line broadband, and digital TV.
As of March 31, 2024, Bharti Airtel reported a total income of ₹1,49,982 crores, up from ₹139,145 crores in FY23, representing a growth of 7.8%. The company’s EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) stood at ₹78,292 crores in FY24, compared to ₹71,274 crores in FY23, an increase of 9.8%. Net profit decreased to ₹8,558 from ₹12,287 in the previous year.
State Bank of India
| Market Cap (Cr)₹7,32,086 Cr | Stock Price 22 Aug ’24₹820 | Sales (Cr) (2024)₹439,189 | Net Profit (2024)₹69,543 | CAGR (1 years)42% | PE Ratio10 |
Data sourced from Screener, as of 22 August 2024
State Bank of India (SBI) is the largest public sector bank in India, providing a wide range of banking and financial services to millions of customers. Headquartered in Mumbai, SBI plays a crucial role in the Indian economy and is known for its extensive network and innovative banking solutions.
For the fiscal year 2024, State Bank of India (SBI) reported a consolidated revenue of ₹439,189 crores, an increase of 25.2% from ₹350,845 crores in 2023. The bank’s net profit for the year stood at ₹69,543 crores, up 20.4% from ₹57,750 crores in the previous year.
ITC
| Market Cap (Cr)₹6,30,926 | Stock Price 22 Aug ’24₹505 | Sales (Cr) (2024)₹70,866 | Net Profit (2024)₹20,751 | CAGR (1 year)12% | PE Ratio30.8 |
Data sourced from Screener, as of 22 August 2024
ITC Ltd is one of India’s foremost private sector companies, operating across diverse sectors including FMCG, hotels, paperboards, and packaging. The company is recognized for its commitment to sustainability and has consistently delivered strong financial performance.
For ITC Ltd, in FY24, sales decline slightly to ₹70,866 crore from ₹70,919 crore in FY23. However, operating profit also rose to ₹26,233 crore from ₹25,704 crore in the previous year, an increase of 2.06%. Additionally, net profit saw an uptick, reaching ₹20,751 crore in FY24 compared to ₹19,477 crore in FY23.
Larsen & Toubro
| Market Cap (Cr)₹4,95,892 | Stock Price 22 Aug ’24₹3,606 | Sales (Cr) (2024)₹15,547 | Net Profit (2024)₹15,547 | CAGR (1 year)34% | PE Ratio37.3 |
Data sourced from Screener, as of 22 August 2024
Larsen & Toubro (L&T) is a leading Indian multinational conglomerate company engaged in engineering, construction, manufacturing, and financial services, with global operations. The company has a strong presence across various sectors, including infrastructure, power, hydrocarbon, heavy engineering, defense, and information technology.
For the fiscal year 2024, L&T reported consolidated revenues of ₹221,113 crore, recording a healthy year-over-year growth of 21%, driven by strong execution across its businesses. The company’s consolidated profit after tax (PAT) for the year stood at ₹15,547 crore, registering a robust growth of 24.1% compared to the previous year.
Sun Pharmaceuticals
| Market Cap (Cr)₹4,20,040 | Stock Price 22 Aug ’24₹1,751 | Sales (Cr) (2024)₹48,497 | Net Profit (2024)₹9,610 | CAGR (1 year)57% | PE Ratio39.8 |
Data sourced from Screener, as of 22 August 2024
Sun Pharmaceutical Industries Ltd is a leading global pharmaceutical company based in India, specializing in the development and manufacturing of a wide range of generic and specialty medications. Known for its commitment to quality and innovation, Sun Pharma plays a significant role in the global healthcare landscape.
For the fiscal year 2024, Sun Pharmaceutical reported consolidated net sales of ₹48,497 crores, an increase of 10.51% from ₹43,886 crores in 2023. The net profit for the year was ₹9,610 crores, up from ₹8,513 crores in the previous fiscal year, reflecting a growth of 12.9%. Additionally, the operating profit (EBITDA) stood at ₹13,018 crores, compared to ₹11,650 crores in 2023, marking a significant increase of 11.7%.
Conclusion
Identifying and investing in multibagger stocks can be a rewarding yet challenging endeavor. While the potential for substantial returns is alluring, it’s essential to approach this investment strategy with a long-term perspective and a thorough understanding of the underlying businesses. The basic rules to pick multibagger stocks include diligently researching industry trends, analyzing financial health, and assessing management capabilities, investors can increase their chances of discovering promising future multibagger stocks. However, remember that past performance does not indicate future results, and careful risk management is crucial.
Disclaimer Note: The securities quoted, if any, are for illustration only and are not recommendatory. This article is for education purposes only and shall not be considered as a recommendation or investment advice by Equentis – Research & Ranking. We will not be liable for any losses that may occur. Investments in the securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of BASL & the certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors.
FAQ
What are multibagger stocks?
Multibagger stocks are shares of companies with the potential to increase in value many times over their current price.
How to invest in multibagger stocks?
Investing in multibagger stocks requires thorough research, focusing on sectors with high growth potential, strong company fundamentals, and competent management teams. Diversification across multiple stocks and sectors is crucial. Multibaggers often take time to appreciate, so a long-term perspective is essential. Always consider the inherent risks and consult a financial advisor for personalized guidance.
How to find multibagger stocks?
To find upcoming multibagger stocks, research companies with strong growth potential in emerging industries, solid financials, and innovative products or services. Pay attention to trends and shifts in the market, and seek out undervalued stocks that analysts predict will perform well. Additionally, subscribe to reputable financial news sources and analysis platforms to stay informed on expert recommendations and market insights.
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I’m Archana R. Chettiar, an experienced content creator with
an affinity for writing on personal finance and other financial content. I
love to write on equity investing, retirement, managing money, and more.
