FY24 threw 12 multibagger stock ideas with consistent earnings growth. Which ones to chase?
For the sake of this study, we considered only those companies with a market capitalisation of over Rs 10,000 crore and excluded the leveraged businesses of banks and NBFCs.
Jupiter Wagons
Topping the list is railway stock Jupiter Wagons, the shares of which have rallied 385% in the last one year. The swelling order book amid a revamp of Indian Railways has meant that its consolidated profit more than doubled in the March quarter. The company has an ambitious plan to raise its capacity to 100,000 wheelsets per annum from the current 10,000 wheelsets over the next 2-3 years at a total capex of Rs 10-15 billion.
Anand Rathi Wealth
The wealth management firm dealing with ultra HNIs reported a 34% increase in consolidated net profit at Rs 226 crore in FY24 while its total revenue during the period grew 35% to Rs 752 crore. Anand Rathi Wealth shares have rallied around 360% in one year.
KPI Green Energy
The solar company has consistently reported over 20% YoY growth in both sales and profit for all the last 4 quarters. The smallcap stock has rallied 310% and the company has also announced a stock split in the ratio 1:2, meaning that one equity share of the company will be split into 2 equity shares.The management is confident of growing the earnings by 45-50% CAGR over next 2-3 years. The current order book in rupee terms is estimated to be at Rs 3,500-3,700 crore which is ~3.5x of its FY24 sales thus offering healthy revenue visibility in medium terms.
SBI Securities has a target price of Rs 2,219 on the stock.
Kalyan Jewellers
Kerala-based Kalyan Jewellers, which reported nearly doubling of profit in March quarter of FY24, has recently acquired a remaining 15% stake in e-commerce platform Candere. The stock is 255% in just a year.
Tata Group’s retailer Trent has been performing consistently not just for the last four quarters. In the last four years (FY2020-24) its revenues and PAT have clocked CAGRs of 39% and 62%, respectively, backed by strong store expansions and consistent double-digit same store sales growth.
Other stocks
Other multibaggers in the list include HBL Power Systems, Action Construction Equipment, GRSE, Newgen Software, Anant Raj, Kaynes Technology and Elecon Engineering.
What should investors do?
Most analysts are bullish on sectors like autos, capital goods, PSUs, power, and infra sectors, which have performed well over the last three years.
“Double-digit equity returns are very likely and sustainable over the next 3 years as earnings will compound at a similar pace. Modi 3.0 will be more of the same which provides great visibility to sustenance of growth in the forthcoming years. We do not envisage any significant
shift of policy stance; however, we may see some recalibration to address some of the key voter issues,” said Naveen Kulkarni, Chief Investment Officer, Axis Securities PMS.
He has suggested investors to utilise market dips to build up positions as the long-term continues to be robust.
The post-election rally, however, has surprised analysts with Emkay Global seeing little near-term upside in Nifty from current levels because of elevated valuations and lack of positive catalysts.
“We are constructive on the manufacturing/investment cycle and prefer playing it through durables (Auto) and materials. We, however, also see counter-intuitive opportunities in FMCG and Tech on relative valuations. Industrials and Financials are better played through select small and midcaps, in our view,” said Emkay’s Seshadri Sen.
(Data: Ritesh Presswala)
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
