Best Multibagger Stocks to Invest in India for 2024: How to Identify, And More (2024)

Last Updated on Jul 16, 2024 by Anjali Chourasiya

Investing in the stock market can be a complex and rewarding endeavour, especially when you come across multibagger stocks. You might wonder, “What are the best multibagger stocks in India?” Multibagger stocks are those that provide returns several times their initial investment over a specific period. They can be a boon for investors looking to significantly grow their wealth.

However, identifying such high-potential stocks requires a deep understanding of company fundamentals, industry trends, and management quality. This article explores some of the best multibagger stocks in India for 2024, providing insights on how to identify potential multibaggers, their key features, and associated risks.

What are Multibagger Stocks?

Multibagger stocks are equity shares of a company that have generated returns several times higher than their cost of acquisition. In simple terms, if a stock doubles in price, it is called a two-bagger. Similarly, a stock that rises multiple times its initial investment value is termed a multibagger stock.

List of Best Multibagger Stocks in India – Updated July 2024

Note: To find out the best multibagger stocks of 2024, we used the Tickertape Stock Screener with the following filters.

• Stock Universe: Nifty500
• The closing price of stocks is Rs. 50 and above
• 5Y CAGR of 50% and more
• Positive net income to ensure the companies are profitable

Note that the data discussed is as of 11th July 2024, and we have only used a few metrics to screen multibagger stock; you can use others based on your preference. For instance, if you want to look for multibagger penny stocks below Re. 1, you can set the close price to less than Re. 1.

Note that these stocks are in no order of preference. Please note that these stock selection criteria and the stocks are provided for informational purposes only; it is essential to conduct your own research.

🚀 Pro Tip: Explore Tickertape’s Financial Statements for detailed company financial reports to make informed investment decisions.

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Overview of the Top Multi Bagger Stocks in India

Lloyds Metals And Energy Ltd

Founded in 1977, Lloyds Metals and Energy Ltd operates in the Iron & Steel sub-sector. The company specialises in the production and distribution of iron and steel products. Over the years, Lloyds Metals has established itself as a significant player in the industry, providing high-quality materials for various industrial applications.

As of 11th July 2024, the company has a market capitalisation of Rs. 34,609.41 cr. and a stock price of Rs. 745.25. It boasts a PE ratio of 27.85 and a remarkable 5-year Compound Annual Growth Rate (CAGR) of 144.32%. The net income stands at Rs. 1,242.93 cr. Learn more about it here.

Jupiter Wagons Ltd

Jupiter Wagons Ltd, operating in the Rail sub-sector, was established to manufacture and supply rail wagons and related products. The company has grown to become a key player in the rail industry, providing essential equipment for rail transport and infrastructure.

With a market capitalisation of Rs. 29,835.63 cr. and a stock price of Rs. 689.35, Jupiter Wagons has a PE ratio of 89.99 and a 5-year CAGR of 110.20%. The net income is Rs. 331.56 cr. Learn more about it here.

Rattanindia Enterprises Ltd

Rattanindia Enterprises Ltd, involved in the Power Trading & Consultancy sub-sector, offers services in power trading and consultancy. The company has a strategic focus on sustainable energy solutions and power sector reforms, which are critical in the evolving energy landscape in India.

The company’s market capitalisation is Rs. 11,066.43 cr., with a stock price of Rs. 79.46. It has a PE ratio of 25.97 and a 5-year CAGR of 107.82%. Rattanindia Enterprises has a net income of Rs. 426.14 cr. Learn more about it here.

Adani Green Energy Ltd

Adani Green Energy Ltd, part of the Adani Group, operates in the Renewable Energy sub-sector. Launched to spearhead the group’s renewable energy initiatives, the company focuses on developing and operating solar and wind energy projects across India.

The company has a market capitalisation of Rs. 278,227.38 cr. and a stock price of Rs. 1,747.05. It has a PE ratio of 252.93 and a 5-year CAGR of 104.00%. With a net income of Rs. 1,100.00 cr., Adani Green Energy continues to play a crucial role in India’s transition to sustainable energy. Learn more about it here.

CG Power and Industrial Solutions Ltd

CG Power and Industrial Solutions Ltd, a key player in the Heavy Electrical Equipments sub-sector, was established to manufacture electrical equipment and solutions. The company serves various sectors including industrial, utilities, and consumer applications, providing innovative electrical products and services.

The company has a market capitalisation of Rs. 117,417.73 cr. and a stock price of Rs. 745.20. It boasts a PE ratio of 82.28 and a 5-year CAGR of 102.56%. With a net income of Rs. 1,427.01 cr., CG Power’s robust performance underscores its critical role in the electrical equipment industry. Learn more about it here.

Jai Balaji Industries Ltd

Jai Balaji Industries Ltd, operating in the Iron & Steel sub-sector, was founded to produce and distribute iron and steel products. The company has expanded its operations over the years, becoming a vital supplier for the construction and infrastructure sectors in India.

The company has a market capitalisation of Rs. 16,265.98 cr. and a stock price of Rs. 871.05. It has a PE ratio of 18.49 and a 5-year CAGR of 102.23%. With a net income of Rs. 879.57 cr., Jai Balaji Industries demonstrates strong financial health and a solid market position. Learn more about it here.

Titagarh Rail Systems Ltd

Titagarh Rail Systems Ltd operates in the Rail sub-sector, focusing on the manufacture of rail equipment and solutions. The company has established itself as a leading provider of rail infrastructure products, contributing significantly to the modernization of India’s rail network.

The company has a market capitalisation of Rs. 24,557.09 cr. and a stock price of Rs. 1,711.45. It boasts a PE ratio of 85.82 and a 5-year CAGR of 100.02%. With a net income of Rs. 286.15 cr., Titagarh Rail Systems continues to be a key player in the rail industry. Learn more about it here.

Elecon Engineering Company Ltd

Elecon Engineering Company Ltd, operating in the Heavy Electrical Equipments sub-sector, specialises in the manufacturing of industrial gears and material handling equipment. The company has a long-standing reputation for providing high-quality engineering products for various industrial applications.

The company has a market capitalisation of Rs. 14,478.28 cr. and a stock price of Rs. 1,292.50. It has a PE ratio of 40.72 and a 5-year CAGR of 97.24%. With a net income of Rs. 355.58 cr., Elecon Engineering showcases its strong financial performance and industry presence. Learn more about it here.

Dixon Technologies (India) Ltd

Dixon Technologies (India) Ltd, a leader in the Home Electronics & Appliances sub-sector, was founded to manufacture consumer electronics and appliances. The company has diversified its product portfolio over the years, becoming a prominent name in the electronics manufacturing sector in India.

The company has a market capitalisation of Rs. 74,689.16 cr. and a stock price of Rs. 12,613.30. It boasts a PE ratio of 203.10 and a 5-year CAGR of 94.33%. With a net income of Rs. 367.75 cr., Dixon Technologies continues to be a major player in the home electronics and appliances market. Learn more about it here.

Fertilisers And Chemicals Travancore Ltd

Fertilisers and Chemicals Travancore Ltd, operating in the Fertilisers & Agro Chemicals sub-sector, was established to manufacture and distribute fertilisers and chemicals. The company plays a crucial role in supporting India’s agricultural sector by providing essential agro chemicals and fertilisers.

The company has a market capitalisation of Rs. 71,896.17 cr. and a stock price of Rs. 1,049.45. It has a PE ratio of 491.87 and a 5-year CAGR of 94.14%. With a net income of Rs. 146.17 cr., Fertilisers and Chemicals Travancore continues to be a key player in the fertilisers and agro chemicals industry. Learn more about it here.

Understanding Multibagger Stocks

The term “multibagger” was introduced by Peter Lynch in his book “One Up On Wall Street.” These stocks are typically associated with high growth potential and significant returns. Understanding the meaning of multibagger is crucial for identifying such investment opportunities.

Wealth creation with multibagger stocks usually occurs over a long period through gradual compounding. These stocks are generally small-cap or mid-cap, with significantly high growth potential. They tend to operate in sectors with considerable growth opportunities and often have strong business models, competitive advantages, and capable management teams.

In essence, identifying multibagger stocks involves recognizing companies with the potential for substantial growth, driven by factors such as innovation, market expansion, and strategic management.

Factors to Consider When Investing in Multibagger Stocks

When considering investing in multibagger stocks, it is crucial to evaluate several factors carefully:

1. Company Fundamentals

You can assess the company’s financial health, including revenue growth, profit margins, and debt levels. Strong fundamentals may indicate the company’s potential to grow significantly. Look for companies with consistent revenue growth, healthy profit margins, and manageable debt levels. For example, Varun Beverages has shown impressive growth with strategic investments and expansion, making it a potential multibagger.

2. Industry Trends

Understanding industry trends can help you identify sectors poised for growth, which might present opportunities for multibagger stocks. For instance, the technology and electric vehicle sectors have been burgeoning with opportunities. Keeping an eye on emerging sectors can help you spot potential multibaggers.

3. Management Quality

The experience and track record of a company’s management team can play a crucial role in its success. Competent management may drive the company towards achieving exponential growth. Look for management teams with a history of successful execution and strategic vision. Companies like Jindal Stainless Steel have shown strong leadership, contributing to their exceptional growth.

4. Innovation and Expansion

Companies that are innovative and have plans for expansion can often become multibaggers. Look for businesses investing in research and development or expanding into new markets. Innovation in products, services, and business models can be a key driver of growth. Dynatrace, for example, stands out for its innovative software solutions and global operational coverage.

5. Market Conditions

Market sentiment and economic conditions also impact the performance of stocks. You might want to consider the overall market environment before investing in multibagger stocks. During bullish markets, growth stocks tend to perform well, while bearish markets may pose challenges.

6. Risk Assessment

Investing in multibagger stocks involves higher risk compared to blue-chip stocks. It is important to conduct thorough research and risk assessment before investing. Diversifying your investments across different sectors and stocks can help mitigate some of this risk. Always assess the potential downside along with the upside.

How to Identify Multibagger Stocks?

If we go by the meaning of the word ‘multibagger,’ it refers to a stock that generates over 100% return (or multiple bags). There are small-cap stocks that generate returns several times higher than the cost of acquisition in real life. We all wish that we had the power to tell the happenings of the future. It would allow us to gauge our chosen stock’s performance and verify whether it is a multibagger. Unfortunately, such things are only limited to reel life.

In real life, it is imperative to understand that such stupendous returns don’t happen overnight. The transition from a small-cap to a mid-cap and finally becoming a large-cap share would demand your patience and perseverance. You also need an eye to unearth potential.

Here are some aspects that would help you identify potential multibagger stocks:

Look for what the industry has to offer

The first and foremost thing that you need to understand is not regarding the stock but the industry to which it pertains. Understand the upcoming trends and which sectors are poised to benefit the most from them. For example, there is an increasing drive to go electric in the vehicles sector. So electric mobility will seemingly gain traction (not that we are recommending it to you!). Make sure the company you are betting on belongs to one of these industries.

Look at the company’s product portfolio

The next step is to look at a company’s shares and delve deeper into its product portfolio. The motive is to understand their core competencies and if they have the potential competitive edge over others. To figure out the right companies, look for the latest developments in the sectors you are interested in and then look for the right companies that seem to be the biggest contenders for growth and expansion.

Check the debt levels

The debt ratio signifies the debt portion of the total capital that an organisation utilises for its operation. Typically, a ratio of 0.5 or lower represents lower debt in the company’s capital structure. The higher the debt, the more likely the company’s cash flow will be unstable. A positive and free-flowing cash flow shows growth potential.

Look into the earnings and valuation

The next step is to dive deeper into its recent financials and figure out its earnings growth. A growing EPS is an excellent indicator of an increase in wealth. After that, figure out the stocks that are undervalued. If the company’s shares are underpriced, there is a high chance of becoming a multibagger stock.

Look for future potential

Looking into past financial statements is an indicator of present performance, but it won’t necessarily reflect the future. It is not an IPL auction, and you need not place your bets based on past performance alone.

To find out true potential, look into the organisation’s management and promoter holding. A strong management team is more likely to drive growth and bring about success. Also, look for companies with high promoter holding, as it is an indicator of confidence in whatever they are trying to create. Tickertape’s promoter holding filter allows you to check the percentage of the company’s common stock held by promoters.

Advantages of Investing in Multibagger Stocks

Investing in multibagger stocks can be highly rewarding. Here are some advantages you might consider:

1. High Returns

Multibagger stocks may offer substantial returns, multiplying the initial investment manifold over time. This can be particularly advantageous for long-term investors who have the patience to hold onto their investments as they grow.

2. Wealth Creation

These stocks can significantly contribute to long-term wealth creation, helping you achieve your financial goals. By identifying and investing in multibagger stocks, you can potentially build a substantial portfolio over time.

3. Market Outperformance

Often, multibagger stocks outperform broader market indices, providing better returns than average market growth. This outperformance can enhance the overall performance of your investment portfolio.

4. Growth Potential

Investing in companies with high growth potential in emerging sectors or innovative industries can be a lucrative opportunity. These companies often lead the way in new technologies and market trends, offering substantial upside potential.

Risks of Investing in Multibagger Stocks

Investing in multibagger stocks can be enticing due to their potential for high returns. However, it is essential to be aware of the risks involved. Here are some potential risks you might consider:

Bulk Purchases and Substantial Risk

Investing in multibagger stocks often requires substantial capital, which can expose you to significant risk if the stock’s value collapses. The notion of “the higher the risk, the greater the reward” often applies to penny stocks, but this can become detrimental if the stock starts to decline.

Value Traps and Economic Bubbles

Many investors may fall into value traps or economic bubbles driven by temporary high demand for a product or service. This demand can be artificially inflated by bulk investors creating a false bull market, only to short-sell and trigger a collapse.

Long-term Investment Lock-in

Multibagger stocks typically take a long time, often over two decades, to mature and deliver significant returns. This long-term horizon means your capital may be tied up for years, making it crucial to resist the urge to sell prematurely.

Trick Trades and Artificial Inflation

You might encounter trick trades, where artificial inflation is caused by others investing heavily to manipulate the stock price. Many multibagger stocks are small-cap stocks with low market capitalisation, making them vulnerable to manipulation.

Low Liquidity and Performance Issues

Multibagger stocks often suffer from low liquidity and performance issues in their early stages. This low liquidity means that any rumours or negative news can trigger a price collapse. Recovery from such collapses can take months, adding to the risk.

Understanding these risks can help you make more informed decisions when considering investing in multibagger stocks. It is essential to perform thorough research and due diligence to mitigate these risks effectively.

To Conclude

Investing in multibagger stocks can be an exciting and potentially rewarding strategy. While these stocks may offer high returns, it is essential for you to perform thorough research and consider various factors before making investment decisions. Keeping an eye on company fundamentals, industry trends, and management quality can help you identify potential multibaggers in the market. You might want to diversify your investments to manage risk effectively. Additionally, consulting with a financial advisor could provide personalised guidance based on your financial goals and risk tolerance, helping you make more informed decisions.

Frequently Asked Questions About Multibagger Stocks