Everyone wants to have multibagger stocks in their portfolio, and since you are reading this article, it won’t be wrong to assume that you also want to know the top multibagger stocks. You can connect with the top 10 SEBI registered investment advisor to have multibagger stocks that meet your investment goals and risk profile. For now, let us focus on multibagger stocks.
What are multibagger stocks?
A multibagger stock gives you returns multiple times your original investment. For example, you invest in a stock at Rs 1000, and its price increases to Rs 5000. It is known as a five-bagger. These stocks are the dream of every investor, promising exponential wealth growth. Let us look at some characteristics of multi-bagger stocks:
- Strong Fundamentals: These have a strong business model, robust financials, and efficient management.
- Growth Potential: They are usually companies in high growth sectors with expanding market opportunities that are likely to be multi baggers.
- Competitive Advantage: A unique selling proposition or strong brand can help a company outperform competitors.
To help you better understand multibagger stocks, let us look at the multi baggers from the past:
- Infosys: Infosys has been a multibagger for many investors. The stock price was trading at Rs 150 in 2009. Today, it is over Rs 1850 – 12x returns in 15 years.
- HDFC Bank: The bank’s consistent growth and strong market position have made it a favorite among investors. From Rs 140 in 2009, the stock price has increased to over Rs 1600 in 2024.
Why invest in multibagger stocks?
A few thousand can grow to a lakh – that is the power of multi-bagger stocks. Here are some reasons to invest in multi-bagger stocks:
- Exponential Wealth Growth: The top reason is the potential for massive gains. A small investment can turn into a substantial fortune.
- Outperformance: Multi-baggers typically outperform the broader market index, delivering superior returns to investors.
- Portfolio Enhancement: Even a single multi-bagger can significantly boost overall portfolio performance. The gains from multibaggers can also compensate for the losses you may incur in one or two stocks (even if 100%).
Multi Bagger stocks to buy in India 2024
Here are the 5 multibagger stocks:
Jai Balaji Industries: It is an integrated steel manufacturing company that produces various steel products, including pig iron, ferroalloys, sponge iron, and long and flat steel products. The company serves diverse sectors, but they have experienced fluctuating financial performance due to the cyclical nature of the steel industry, which is influenced by global steel prices, demand, and input costs.
CG Power and Industrial Solutions: They are a leading player in the global electrical equipment industry. The company manufactures transformers, switchgear, circuit breakers, and other power equipment. It serves various sectors, including utilities, industrial, and infrastructure. CG Power has a significant international presence, with operations and sales across multiple continents, including Europe, Asia, and North America.
Jupiter Wagons: The company is a major manufacturer of railway wagons and related components. The company caters to Indian Railways and other private sector clients, providing a wide range of freight wagons, passenger coaches, and other railway equipment. One of the reasons why this company should be on investors’ radar is because they are known for their focus on innovation. They have continuously improved their product offerings to meet the evolving needs of the railway sector.
HBL Power Systems: It is a leading manufacturer of specialized batteries, power electronics, and other related products. The company serves the defense, aviation, and industrial sectors, providing reliable power solutions for critical applications. They offer a wide range of products, including nickel-cadmium batteries, lead-acid batteries, and lithium-ion batteries. The increasing demand for energy storage solutions, driven by the growth of renewable energy and electric vehicles, presents significant growth opportunities for the company.
JBM Auto: They are a key player in the Indian automotive industry, specializing in manufacturing auto components, systems, and assemblies. The company also has a strong presence in the electric vehicle (EV) segment, producing electric buses and other EV-related products. It operates through three main segments: automotive, railways, and EVs. In the automotive segment, the company supplies components to major OEMs, while in the EV segment, it focuses on manufacturing and promoting sustainable mobility solutions.
Risks associated with multibagger stocks
Investors should understand that finding multibagger stocks is not easy. You may face significant risks if you only focus on having multibagger stocks in your portfolio. Here are some risks associated with multibagger stocks:
- High Volatility: Multibagger stocks exhibit high price fluctuations (a single negative news and stock price can come down significantly), which can lead to significant losses in the short term.
- Overvaluation: It is challenging for investors to determine if a stock is genuinely undervalued or overhyped. Most multibagger have already given up a decent runup, and you may not find them at a fair valuation.
- Liquidity Risk: Some multibagger stocks have low trading volumes. If that is the case, you may find it difficult to buy or sell quickly.
- Opportunity Cost: Running after a potential multibagger can mean missing out on gains in other sectors or asset classes.
Before you go
To identify the best multibagger stocks is not easy. Even if you find one, it would be tough for most investors to hold them amid volatility. Don’t run after only multibaggers. Diversify your portfolio across industries and sectors. If you are confused about the best stocks for the long term and how to create your equity portfolio, you can check Jarvis Invest.