The Nifty and the Sensex have been on a secular bull run since 1980, but these indices can only give gains up to a point. Multibagger stocks, on the other hand, can give about 10 to 20 times more gains.
Case in point: In 2003 the Nifty was not even at 1000 and the Sensex was about 3,000. If one picked a stock like Hindustan Zinc, which at that time was Rs 1.45 per share, the gains earned today would be aboud 155 times. And the Sensex has gained just 10 times, infact lesser than that.
On this Diwali, CNBC-TV18 jots down some such stocks with the expertise of market specialists SP Tulsian, Ashish Chugh and Basant Maheshwari, all multibagger gurus.
Tulsian's multibagger picks:
The company is into readymade garments. Blackstone is the promoter of the company and it holds 58 percent. The company has a very good product line. They make two million pieces per month or 24 million pieces per annum and cater to their global brand. The company has a turnover of Rs 1,000 crore . The stock is available at Rs 50-60 and the promoter is looking to de-monetise the assets of the company.
This is a multi-product company. They have presence in the logistic space and in packaging. They are the India's largest cap makers in metals as well in polymers. Presently, they have two acre plot that the company is looking to monetise for close to Rs 400 crore. The company, meanwhile, has a debt of less than Rs 100 crore.
Focus on the company's logistic and packaging businesses. Both have tremendous growth potentials and respectable promoter holding.
This may not be strictly a multibaggers. Multibaggers should not be implied or treated as 1x, 2x, 3x or 4x. The company has gone into trade to trade (T2T), because they have not finalised their accounts for March and June. The BK Birla Group company has not finalised its accounts for last three quarters because they wanted to sell their tyre division, but now they have completed their accounts.
Within the next one month, they have to finalise two quarter results. By December, the stock should be out from the T2T and that itself is a big trigger. Furthermore, there's talk that the company may be coming back into the fold of Kumar Mangalam Birla.
Chugh's multibaggers:
This is a company which is available at a market cap of just about Rs 400-450 crore. It has 100 acres of land bank at Bhakti Park, 66 acres at Kanjurmarg and 20 acres in Bangalore. If one just does a back-of-the-envelope calculation of the value of the realisable value of the property which they can do, that itself if huge.
The difference between this company and the other companies in the real estate sector is that this company is not really stressed in terms of very high debt. It has debt, but it has got debt at manageable levels about Rs 300-350 crore. So, here is an opportunity where I believe the intrinsic value could be much higher where as the valuation of the company is much low.
However, at the same time the sector is something which nobody wants to touch at this point of time. If somebody ask me 10 questions I may not be able to satisfactorily answer those questions because it is unfavoured sector. So, there are challenges but it is only because challenges that this is available at Rs 400 crore.
Watch video for more.
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