Over 5,000% return in 10 years! Should you buy these well-known multibaggers now?

Time spent in the market matters the most to get multibaggers return from your high conviction bet. Data available with Ace Equity showed that as many as 17 stocks in the BSE 500 index have rallied over 50 times in the past 10 years despite volatility in the form of volatile crude oil prices, demonetisation, implementation of GST, RERA and eruption of Covid-19 pandemic, among others. Brokerages are still bullish on select companies despite the huge run-up.

With a rally of 13,840 per cent, Caplin Point Laboratories emerged as the top gainer in the list. Shares of the company jumped to Rs 812.70 on August 16, 2022 from Rs 5.83 on August 16, 2012.

It was followed by Alkyl Amines Chemicals (up 13,396 per cent), Tanla Platform (up 12,793 per cent), Deepak Nitrite (up 12,600 per cent) and UNO Minda (up 10,884 per cent). This means Rs 1 lakh invested in these stocks 10 years back has now turned into over Rs 1 crore at present. On the other hand, the benchmark BSE Sensex gained 239 per cent to 59,842 during the same period.

YES Securities sees over 60 per cent upside in Tanla Platforms post Q1FY23 results. “We expect EBITDA margin to improve going ahead led by improved execution. Platform segment (higher gross margin) growing faster than enterprise segment will also support margin going ahead,” it said.

The brokerage also upgraded Deepak Nitrite with a target price of Rs 2,350. “We upgrade Deepak Nitrite to ‘Add’ (from Reduce), given the capex program in capacity expansion and augmentation of product portfolio,” YES Securities said.

While sharing the qualities of multibagger stocks, Sunil Nyati, Managing Director, Swastika Investmart, who has over 30 years of experience in the investing world, said, “In India, companies having quality management, ability to scale without consuming too much capital and are a part of an underpenetrated industry having a huge runway of growth have turned multibaggers in the long run.”

“The ability to generate free cash flows, competitive advantages, corporate governance and management integrity, management’s treatment of minority shareholders, and judicious capital allocation are some of the qualities that an investor should check before picking a stock on Dalal Street for the long term,” Nyati added.

Data further highlighted that players like HLE Glascoat, Tata Elxsi, Balaji Amines, KEI Industries, Navin Fluorine International, Astral, Bajaj Finance, APL Apollo Tubes, Westlife Development, Garware Technical Fibres, SRF and GMM Pfauder also rallied between 5,500-10,000 per cent since August 2012.

Julius Baer Equity Research is bullish on SRF with a target price of Rs 2,700, indicating an upside of 8 per cent from the current market price. “We remain constructive on SRF’s growth prospects, on its strong product pipeline, capacity additions, expansion into new markets, and increasing demand from the agrochemical and pharma segments,” Julius Baer Equity Research said in a report.

Commenting on high conviction bets, Nyati said, “The biggest learning for me is to never time the market because the market is the smartest among all. If you have conviction in a particular theme or stock then you should have patience.”

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