Investors are always on a quest to find the next big thing in the markets.
Finding stocks that can multiply your original investment cost many times, commonly known as multibaggers, is the holy grail for many investors.
But to find and own such stocks, one must remember that the money is not in buying and selling, but in holding.
Renowned investor and billionaire Warren Buffett was quoted as saying:
If you are not thinking about owning a stock for ten years, don’t even think about owning it for ten minutes.
He strongly believes that one must hold his investments for a longer period of time to witness the taste of the composition.
In the last decade, the stock market has thrown multiple opportunities in front of investors to become a millionaire or even a billionaire.
Those who were sitting down and holding high-quality stocks during tough times would have made massive returns on their investments.
Let’s take a look at the list of stocks that have converted ₹ 1 lakh of investment to more than ₹ 1 crore in the last 11 years.
1. Avanti Feeders
Avanti Feeds (AFL) has established its presence in the aquaculture field by being involved in manufacturing high-quality shrimp feed, operating the Vannamei hatchery, and processing and exporting shrimp.
As of April 2010, Avanti Feeds’ share price was at ₹ 1.6 per share and the stock is currently trading at ₹ 562. The company has delivered returns of 35.019% in the last 11 years.
A lakh invested in 2010 would have become ₹ 3.5 crore.
In the last 3 months, the company’s mutual fund holding has increased by 1.28% to 4.28%, while in the same period the company’s foreign institutional holding has remained almost constant.
On the financial front, Avanti Feeds’ June 2021 quarter results disappointed when it came to profitability. An increase in the cost of raw materials in the shrimp feed division hit the company’s profitability.
In fiscal year 2021, shrimp feed consumption in India decreased compared to the previous year.
On a positive note, despite the disruption due to the Covid-19 led lockdown, the company managed to maintain its market share in the shrimp feed business at 48-50%.
Avanti feeds is a small-cap company with a market capitalization of ₹ 76.4 billion.
2. Bajaj finances
Bajaj Finance is primarily in the loan business.
It has a diversified loan portfolio of retail, small and medium-sized enterprises (SMEs) and commercial clients with a significant presence in urban and rural India.
It also accepts public and corporate deposits and offers a variety of financial services products to its clients.
The company’s price has soared from ₹ 33 per share to ₹ 7.508 to date, registering an increase of around 22.652% in the last 11 years.
If you had invested ₹ 1 lakh in the company, it would have become ₹ 2.3 crore at the current valuation.
In fact, in the last year, Bajaj Finance has given a 108% return on EEB. The company is growing at a compound annual growth rate (CAGR) of 61% in the last 10 years.
For the June 2021 quarter, the company’s net profit increased marginally 4% YoY (YoY). Its asset quality remained under pressure as gross nonperforming assets (NPA) and net NPA increased during the quarter.
Bajaj Finance belongs to the large-cap space and recently reached ₹ 4 tn in market capitalization.
3. Atul Limited
Atul is a diversified and integrated Indian chemical company (a part of Lalbhai Group, Gujarat).
The company’s products are used in various industries and are mainly divided into two segments, life science and performance chemicals and other chemicals, in 9 businesses.
Over the past 11 years, the company has delivered stellar returns of 10,097%. In 2010, the share price was at ₹ 91.3. It is now trading at ₹ 9,309 on the BSE.
If an investor had invested in this counter after the global slowdown in 2009 or say about 11 years ago, ₹ 1 lakh would have turned into around ₹ 1 crore.
Over the past 10 years, the company is growing at a CAGR of 45%.
The national chemical industry has multi-year tailwinds such as global companies moving to India for raw material sourcing, along with initiatives taken by the government to promote the national industry.
This will help strong companies like Atul in the sector show consistent and profitable growth.
The company belongsto a mid-cap space with a market capitalization of ₹ 272.7 billion.
4. PI Industries
PI Industries is a leading player in the agrochemical space with a strong presence in the domestic and export markets.
It has state-of-the-art facilities in Gujarat that have integrated process development teams with in-house engineering capabilities.
The company’s shares have delivered a return of more than 10,900% in the last 11 years. PI Industries’ share price, which stood at ₹ 31 in April 2010, increased to ₹ 3,410 during the period.
An investment of ₹ 1 lakh in this stock in 2010 would now have become ₹ 1.1 crore.
The past year has been particularly good for the IP industries, as stocks have gained 82%. By comparison, the benchmark Sensex index gained 51% over the last year.
Over the past few months, the company’s holding of mutual funds and foreign institutions has been almost constant.
PI Industries is a large-cap company. Currently, its market capitalization stands at ₹ 519 billion.
5. Astral Poly Technik
Astral Poly Technik is dedicated to the production of plastic products. The company and its subsidiaries are in the business of manufacturing and marketing pipes, fittings, and adhesive solutions.
Astral Poly Technik shares have provided good returns for its investors for the past 11 years.
The company’s share price has gone from ₹ 12.6 in April 2010 to ₹ 2,117 on BSE. Over the years, it has managed to give a profitability of 16,701%.
Investing ₹ 1 lakh in 2010 Astral Poly Technik shares would have returned ₹ 1.7 crore today.
In the last 5 years, the company’s market share has increased from 5.1% to 6.39%.
On the financial front, Astral Poly posted a net profit of ₹ 739m for the period ended June 30, 2021, up 271.4% versus ₹ 199m for the same period last year.
Astral Poly Technik belongs to the mid-cap space with a market capitalization of ₹ 422 billion.
How to identify multi-bagger stocks
As a retail investor, if you are looking for stocks from multiple exchanges in India, you need to weigh all the pros and cons before investing in any company.
The objective of an investor should be to find a good investment and not necessarily a multibagger. This is because you need to have a comprehensive investment process that meets all of your criteria.
If you go in with the assumption that every stock you invest in will be a multibagger, you will be disappointed. It won’t work that way.
The future is uncertain. Your justification for buying a stock may change and you will have to be careful about that.
The idea should be to buy a good quality stock in a company, look for a business that has a solid foundation, a solid growth strategy, attractive valuations, ethical business practices, and an exceptional management team.
As long as these factors are in place, you should stay invested for the long term rather than being agitated by short-term market volatility and price fluctuations.