Multibagger Stocks to Invest in India

  • 01 Apr 2024
  • Read 14 mins read

Multibagger stocks offer high returns on initial capital, making them a desirable asset in an investor's portfolio. Multibagger stocks are categorized by the fold increase they offer, with two-fold increases leading to two-baggers, ten-fold to ten-baggers, and so forth. Identifying a multibagger stock requires sifting through the market to find undervalued stocks with intrinsic growth potential to achieve multifold returns. However, identifying a multibagger stock is challenging, as not all stocks with strong fundamentals qualify. Multibagger stocks are predominantly undervalued despite having solid fundamentals, suggesting a significant upside potential for value appreciation over time. In this article, we will look at the best multibagger stocks along  with their overview.

What are Multibagger Stocks?

The potential of the stock to "bag" profits on original money invested numerous times is the source of the name "multibagger". Multibagger stocks don't have a set definition; instead, they are classified according to the fold rise they provide: two fold increases result in two-baggers, ten fold increases in ten-baggers, and so on. Despite having strong fundamentals, these companies are largely reasonable, which points to the possibility of considerable future value increase.

Table of Content

  1. What are Multibagger Stocks?
  2. Best Multibagger Stocks List in India 2024
  3. An Overview of the Top Multibagger Stocks in India
  4. Why Invest in Multibagger Stocks in India?
  5. How to Invest in Multibagger Stocks?
  6. Advantages of Investing in Multibagger Stocks
  7. Risks Associated With Multibagger Stocks- H2 Listicles
  8. Some Alternative Investments to Multibagger Stocks

 

Best Multibagger Stocks List in India 2024

Here is a table of the best multibagger stocks for the next 5 years in India: 

NameMarket Cap (₹ in crore)5Y CAGR (%)1Y Return (%)
Bharat Electronics Ltd₹ 1,44,47745.1113.7
Adani Enterprises Ltd₹ 3,54,19886.970.9
Hindustan Aeronautics Ltd₹ 2,11,17554.3150.1
Varun Beverages Ltd₹ 1,82,59663.7106.7
Tata Elxsi Ltd₹ 47,64451.827.5
Tube Investments of India Ltd₹ 72,32958.949.5
Linde India Ltd₹ 55,85868.466.5

Disclaimer: The market capitalization, CAGR, and one-year return mentioned above are accurate as of 22nd March 2024. However, it's important to do your research before making any investment decisions in these stocks.

An Overview of the Top Multibagger Stocks in India

Here is a detailed view of multibagger stocks for the next 5 years:

  • Bharat Electronics Ltd.

    This is a government-owned aerospace and defense company that manufactures aircraft, helicopters, engines, and accessories. Apart from defense, this company deals in non-defense departments such as cyber security, e-mobility, civilian radars, etc. BEL was established in 1954 under the vision of the Ministry of Defence to meet the defense needs of modern India. The mission of BEL is to be customer-focused and competitive in the area of defense by maintaining thorough quality and tech- innovation. The company has shown a profit of 18.79% for the past three years. The company has emerged with a healthy return on equity of 21.38%. Also, the return on capital employed stands at 29.20% for 3 years straight.

  • Adani Enterprises Ltd.

    Adani Enterprises Ltd. is one of the leading portfolio companies of Adani Group. This company majorly deals in humongous scale projects based on the energy and infrastructure sector nationwide. Apart from this, the company also deals in consumer products, logistics, and transportation. AEL was incorporated on 2nd March 1993 and led by Mr Gautam Adani at that time. The vision of this company is to provide infrastructure with a sustainable method as per the needs of the evolving India. The company has shown a good profit of 32.42% for the past three years. The company has emerged with a healthy revenue growth of 60.75%. Also, the company is debt-free and has good cash flow management. There was a significant drop in debt by 1811.58 Cr. The company is operating on a high PE of 141.41.

  • Hindustan Aeronautics Ltd.

    Hindustan Aeronautics Ltd. is a government-backed company previously known as Aeronautics India Limited. This company has a successful history of being one of the oldest and largest defense manufacturers in the world. Walchand Hirachand founded the company in Bangalore on 23rd December 1940. Currently, the Government of India is the major stakeholder in this by backing up 71.65% ownership. HAL manufactures Fighter Jets such as Sukhoi and Mig. However, it is not only limited to this. It also has a production wing for helicopters and various aviation accessories. For the past three years, the company has shown a good profit of 26.92%. The company has emerged with a healthy return on equity of 26.41%. Also, the return on capital employed stands at 29.13% for 3 years straight.

  • Varun Beverages Ltd.

    Varun Beverages Ltd. is one of the leading companies in the beverage industry and the largest franchisee of Pepsico (one of the major players worldwide). VBL runs its business through a franchisee mode in multiple Indian states and internationally. Some major products are Pepsi, Mountain Dew, 7Up, Pepsi black, and Mirinda. Some non-carbonated products are Tropicana, Gatorade, and water named Aquafina. The company has shown a good profit of 98.65% for the past three years. The company has emerged with a healthy revenue growth of 37.34%. Also, the return on capital employed stands at 21.83% for 3 years straight. The interest coverage ratio of the company is a good 10.69.

  • Tata Elxsi Ltd.

    Tata Elxsi Ltd. originated in 1989 to create electronic applications, embedded systems, and software. Their main objective was to encourage innovation in the fast-emerging IT market and to speed up the adoption of leading-edge technologies. The company's track record is a good 36.11% and has delivered an average profit growth of 43.40% in the last three years.

  • Tube Investments of India Ltd.

    As a Murugappa Group member, Tube Investments of India Ltd. (TII) is a leading engineering firm. The Group is headquartered in Chennai and has 28 businesses. Among the Group's principal businesses are Cholamandalam Investment and Finance Company Ltd. and Carborundum Universal Ltd. Since the last three years, Tube Investments has had a good profit growth of 26.25% and it has shown a good revenue growth of 19.17%.

  • Linde India Ltd.

    Linde India Limited was founded in 1935 and is a prominent producer, distributor, and dealer of medical oxygen plants, nitrogen gas cylinders, oxygen gas cylinders, argon gas cylinders, and other related items. These products regularly satisfy international quality requirements, thanks to a trustworthy network of suppliers selling raw ingredients with guaranteed quality. Modern, computer-assisted technology is used in manufacturing units to guarantee error-free mass output.

For the past three years, the company has shown a good revenue growth of 21.19% and they even have maintained a healthy ROCE of 20.49%. The company is debt-free and they also have good cash flow management. 

Why Invest in Multibagger Stocks in India?

For investors looking for portfolio diversification buying good multibagger stocks in India can be a suitable approach. The following are a few reasons why investors can buy multibagger stocks in India:

  • India's economy is growing fast due to its young population, urbanization, and increasing earnings, creating a favorable environment for business expansion and growth prospects.
  • Investors can tap into India's diverse growth opportunities in renewable energy, infrastructure, healthcare, and technology.
  • India's tech innovations offer multibagger opportunities for finance and e-commerce businesses amid the digital transformation.
  • India's growing young population offers a large talent pool and customer base for business expansion, driving innovation and economic progress.

How to Invest in Multibagger Stocks?

The following advice can help you to buy the best multibagger stocks for the future: 

  • Explore Growing Sectors and Companies
    Research growing industries and businesses with strong leadership, durable structures, and financial performance.
  • Conduct Research
    Do thorough research on potential investment targets by examining their financial records, conducting market research, and studying past results to identify trends.
  • Stay Informed
    Stay updated on market dynamics and external events that affect your stocks. With this information, you can make informed decisions.
  • Portfolio Diversification
    To minimize risk, diversify your investment portfolio by distributing your funds across a variety of companies and industries instead of investing only in high-potential stocks.
  • Seek Professional Advice
    If you're struggling to find growth opportunities, talk to a financial advisor or investment professional. They can offer insights, research reports, and recommendations to fit your goals and risk tolerance.

Advantages of Investing in Multibagger Stocks

Purchasing low price multibagger stocks has several benefits: 

  • Possibility of Large Returns:

    Multibagger stocks have the potential to provide profits that are significantly larger than the initial investment and purchasing the best multibagger stocks has the potential to generate significant growth.

  • Decreased Risk through Diversification:

    By distributing risk over several assets and industries, multibagger stocks can help you diversify your holdings and lower risk. By doing this, the effect of a single stock's performance on your portfolio as a whole can be lessened.

  • Prospective Revenue Generation: 

    Dividend-paying multibagger stocks provide a chance to bring in a consistent stream of money and investors can speed wealth building and multiply their gains by reinvesting dividends.

    Risks Associated With Multibagger Stocks- H2 Listicles

    There are certain risks associated with investing in even the best multibagger stocks in India, such as:

    Some Alternative Investments to Multibagger Stocks

    With alternative investments, you can achieve diversification and high returns. Here are some alternative investments to multibagger stocks:

    • Private Equity:

      Investing in privately held companies or funds that invest in private companies can offer high returns, although it typically requires a longer investment horizon and involves higher risk.

    • Hybrid Funds:

      Combining elements of both bonds and equities, hybrid funds can be seen as alternative investments. In addition to stocks and fixed-income securities, these funds can additionally make investments in gold or real estate investment trusts (REITs).

    • Real Estate:

      Investing in real estate is an effective investment strategy that involves purchasing homes to rent them out while possibly gaining the benefits of improvement in value over time.

    • Cryptocurrencies:

      In recent times, cryptocurrencies have gained a lot of popularity as alternative investments. By investing in them, one can get large profits but there is a significant degree of instability and regulatory risks involved.

    Conclusion
    Investing in the best multibagger stocks in India can be a smart strategy for investors seeking to capitalize on wealth and optimize their returns. However, it is important to keep in mind that investing in multibagger companies comes with significant risks that must be properly managed. Investing in multibagger stocks and alternative assets requires patience and a long-term perspective. So start your investment journey with a reliable Online Trading App in India today.

    Disclaimer - Before investing in any of the stocks mentioned above, it's crucial to conduct thorough research and understand the potential risks involved.

    FAQs on Best Multibagger Stocks

    Research and analysis are essential for identifying multibagger stocks. Search for businesses with solid fundamentals, such as steady growth in sales and profitability. 

    Stocks become multibaggers when their share prices rise significantly over time, providing investors with sizable profits. 

    In addition to multibagger stocks, other investment options include real estate, hybrid funds, cryptocurrencies, and equity.

    Risks include lack of liquidity, instability, high failure rate, and lack of diversification. 

    The advantages of investing in low price multibagger stocks are affordability, the possibility of high returns, and diversification of your portfolio. 

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