Best Multibagger Stocks for 2024: Features, Factors, Risks & Benefits of Investing in Multibagger Shares

Multibagger stocks are stocks that have the potential to multiply in value many times over the course of several years. For example, a stock that goes from Rs. 10 per share to Rs. 100 per share would be considered a 10-bagger. Some stocks have even higher growth potential, with the potential to become 20-baggers, 50-baggers, or even 100-baggers. Therefore, any stock that observes a multi-fold growth can be considered a multibagger stock.

The term “multibagger” was coined by well-known investor Peter Lynch to describe equity shares of a firm that may provide returns multiple times greater than their related cost of acquisition. In this article will explore a list of the top multibagger stocks in India for 2024, stock overviews, the meaning of multibagger stocks and how to invest in these multibagger shares. 

Best Multibagger Stocks in India for 2024

Here is the list of best multibagger stocks sorted according to their 5Y CAGR:

Disclaimer: Please note that the above list is for educational purposes only, and is not recommendatory. Please do your own research or consult your financial advisor before investing.

Note: The data in the multibagger share list is from 3rd July, 2024. This data is derived from Tickertape Stock Screener.

🚀 Pro Tip: You can use Tickertape’s Stocks Screener to research and evaluate stocks with over 200+ filters and parameters.

• Stock Universe: Nifty 500
• Close Price: Rs. 50 and above. 
• 5Y CAGR: 50% or more, sorted from highest to lowest. 
• Net Income: Positive

Overview of Top Multibagger Stocks in India

Here is the overview of the shares on our list of multibagger stocks in India:

Lloyds Metals And Energy Ltd

Lloyds Metals & Engineers Limited, originally Nagarjuna Metals & Engineers Limited, was incorporated in April 1977. The company mines iron ore, manufactures sponge iron, and generates power. Over the last 5 years, the company’s revenue has grown at a yearly rate of 66.87%, higher than the industry average of 10.05%. Additionally, the company’s market share increased from 0.09% to 0.84% in the same period, and its net income has grown at a yearly rate of 126.98%, which is also higher than the industry average of 6.05%.

Jupiter Wagons Ltd

Jupiter Wagons Limited, based in Kolkata, West Bengal, is an Indian manufacturer specialising in railway freight wagons, passenger coaches, and related components. They produce cast manganese steel crossings and castings, supplying both Indian Railways and private companies. Over the last 5 years, the company’s revenue has grown at a yearly rate of 60.81%, higher than the industry average of 16.05%. The company’s market share increased from 3.53% to 18.58% in the same period. 

Jai Balaji Industries Ltd

Jai Balaji Industries Limited manufactures and markets iron and steel products in India. They produce sponge iron, pig iron, direct reduced iron (DRI), ductile iron pipes, ferrochrome, TMT bars, coke, steel bars and rods, sinter, ornamental steel grills, Portland slag cement, ferroalloys, alloy carbon and mild steel billets and rounds. Over the last 5 years, the company’s revenue has grown at a yearly rate of 16.29%, higher than the industry average of 10.05%. The company’s market share increased from 0.58% to 0.85% in the same period. 

Adani Green Energy Ltd

Adani Green Energy Limited generates renewable energy for central and state governments and government-backed corporations in India. The company develops, owns, and operates solar, wind, and hybrid power plants, ensuring continuous maintenance and operation. Over the last 5 years, the company’s revenue has grown at a yearly rate of 38.22%, higher than the industry average of 11.33%. The company’s market share increased from 9.82% to 29.25% in the same period. 

Elecon Engineering Company Ltd

Elecon Engineering Company Ltd., founded in 1951, specialises in manufacturing industrial geared motors, reducers, material handling equipment, mining equipment, and casting processes. It is one of Asia’s largest manufacturers of material handling equipment and industrial gears. Over the past five years, the company’s revenue has grown at a yearly rate of 8.96%, higher than the industry average of 0.15%. In the same period, the company’s market share increased from 1.99% to 3.31%. 

Titagarh Rail Systems Ltd

Titagarh Rail Systems Limited was formerly known as Titagarh Wagons Limited. It is an Indian private-sector rolling stock manufacturer. The company’s headquarters are in Kolkata, West Bengal and was founded in 1984. Over the past five years, the company’s revenue has grown at a yearly rate of 19.58%, higher than the industry average of 16.05%. The company’s market share increased from 16.49% to 19.72% in the same period. 

Dixon Technologies (India) Ltd

Dixon is India’s largest Electronics Manufacturing Services (EMS) provider, specialising in consumer electronics, home appliances, and lighting products. Founded two decades ago, Dixon has grown rapidly and is known for its cost-effective manufacturing, strong design skills, and high-quality customer base. Over the past five years, the company’s revenue has grown at a yearly rate of 42.75%, higher than the industry average of 11.31%. The company’s market share increased from 5.83% to 20.04% in the same period. 

CG Power and Industrial Solutions Ltd

CG Power and Industrial Solutions Limited, formerly Crompton Greaves Limited, is an Indian multinational company. It designs, manufactures, and markets products for power generation, transmission, distribution, and rail transportation. Over the last five years, the company’s revenue has grown at a yearly rate of 1.7%, higher than the industry average of 0.15%. The company’s market share increased from 12.4% to 14.61% in the same period. 

Jindal Stainless Ltd

Jindal Stainless Limited, based in New Delhi, is part of the OP Jindal Group. With a melt capacity of 2.9 million tonnes per annum, it is India’s largest stainless steel producer. Founded in 1970, it ranks among the world’s top five stainless steel manufacturers. Over the last five years, the company’s revenue has grown at a yearly rate of 23.28%, higher than the industry average of 10.05%. The company’s market share increased from 2.55% to 4.96% in the same period. 

JBM Auto Ltd

JBM Auto Limited is the flagship company of the JBM Group. It specialises in automotive engineering, design services, and renewable energy. With 35 manufacturing plants and 4 engineering and design centres, it operates across 18 locations worldwide. Over the past 5 years, the company’s revenue has grown at a yearly rate of 17.67%, higher than the industry average of 8.63%. The company’s market share increased from 0.96% to 1.57% in the same period. 

What are Multibagger Stocks?

Multibagger stocks, introduced by Peter Lynch in ‘One Up on Wall Street,’ yield returns significantly surpassing their acquisition cost. These shares indicate a company’s substantial growth potential, effective management, and advanced production techniques. Additionally, they showcase the company’s strong research and development capabilities, driving heightened market demand. Yet, it’s crucial to note that stocks which can be multibagger can sometimes signal the emergence of an economic bubble in a country, potentially leading to adverse consequences in the long-term financial market. 

Investing in Multibagger Stocks in India with smallcase

You can invest in multibagger stock portfolios via smallcase too! Go to the smallcase website or the app, go to the ‘Discover’ section and search for the ‘Multibagger’ keyword. You’ll get a plethora of small cases to choose from, and you can pick the one that fits your investment criteria.
Investing in multibagger Indian stocks using smallcase’s readymade portfolios is a convenient and hassle-free way to gain exposure to this sector. smallcases provide a diversified portfolio of stocks, reducing the risk of investing in a single stock, and are managed by professionals with expertise in this field. However, doing your own research and due diligence is important before investing in any smallcase or stock. Here are a few smallcases for investors interested in multibagger stocks:

Multibagger Framework: This smallcase, managed by Tequity Investing, is a diversified portfolio of 35-40 micro-cap and small-cap stocks. This portfolio is inspired by Chris Mayer’s book ‘100 baggers’. It is a wonderful book which highlights the importance of holding on to your winning stocks. He aptly says ‘Every hundred bagger goes through a phase when it appears super expensive!’

Multibagger framework smallcase by Tequity Investing

Disclosure for the Multibagger Framework smallcase.

How to Invest in Multibagger Stocks?

Here are some tips on how to invest in multibagger shares:

1. Identify growing industries and companies: Look for growing industries and companies with a strong potential for future growth. Look for companies with a strong business model, solid financials, and a competent management team.
2. Research the company: Research the company you’re considering investing in. Study their financial statements, read industry reports, and look at their historical best multibagger share prices to identify trends. Investors can use tools like the Tickertape Stock Screener to generate a multibagger stocks screener using the 200+ filters available!
3. Look for undervalued multibagger stocks: Look for undervalued multibagger stocks for 2024 in India based on their fundamentals. Such as price-to-earnings ratios, price-to-book ratios, and other financial metrics that may be your preferred criteria. 
4. Monitor market trends: Keep an eye on market trends and news that can affect the stock prices of the companies you’re interested in investing in. This will help you make informed decisions about when to buy or sell.
5. Diversify your portfolio: Investing in the top multibagger stocks for 2024 in India can be risky, so it’s important to diversify your portfolio. Don’t put all your eggs in one basket; instead, spreading your investments across multiple companies and industries may be wiser.

Why Invest in Multibagger Stocks in India?

Investing in multibagger stocks for 2024 in India has the potential to significantly boost your wealth. These stocks have the potential to provide remarkable returns, like turning a Rs. 200 investment into Rs. 2,000, which is a tenfold increase. This is also known as a ten-bagger stock.

Holding onto multibagger shares for a specific duration is crucial to maximising capital gains. This ensures substantial profits by efficiently channelling funds gained from listing shares on the stock exchange. These funds are utilised for research, development, and production, ultimately leading to high profits through substantial sales volume.

How to Find Multibagger Stocks For Investments in 2024?

In investing, a ‘multibagger’ refers to a stock that yields returns exceeding 100%. Such gains, however, unfold over time and aren’t instant. Moving from a small-cap to a mid-cap and eventually a large-cap stock requires patience and insight into potential growth.

To identify potential multibaggers, consider these steps:

1. Understand industry trends: Focus on sectors poised for growth, such as electric vehicle mobility.
2. Assess the company’s product portfolio: Look for companies with strong competitive advantages and evolving product lines.
3. Evaluate debt levels: Lower debt-to-equity ratios indicate financial stability. This is crucial for sustained growth.
4. Analyse earnings and valuation: Growing earnings per share (EPS) and undervalued stocks can signal future multibagger potential.

Investigate management and promoter holding: A competent management team and high promoter holding indicate confidence in the company’s prospects.

Features of Multibagger Stocks 

A company should possess the following characteristics to generate multibagger returns:

• Robust Fundamentals: Seek companies with strong financials, including consistent revenue growth, expanding profit margins, and manageable debt. Sound financial health indicates the company’s resilience and ability to fund growth.
• Market Dominance: Companies that lead their industry or niche often yield multibagger returns. Market leaders typically possess competitive advantages like brand recognition, economies of scale, or unique intellectual property.
• Innovative Disruption: Businesses with innovative products, technologies, or disruptive business models can experience rapid growth. Prioritise companies at the forefront of technological advancements.
• Scalability: Favor companies with scalable business models, enabling significant revenue growth without proportionate cost increases.
• Expansive Market: Companies with access to large and expanding markets have a higher potential for multibagger growth. Focus on industries or sectors with substantial and growing demand.
• Advanced Research and Development: Companies with robust R&D deliver quality products, leading to high sales and customer satisfaction. Significant R&D investment is crucial for companies to list their securities as multibagger stocks. Start-ups with unique products and no close substitutes can generate huge market demand and may issue Multibagger stocks to increase paid-up capital. Companies with monopoly or duopoly status can also issue multibagger shares, using aggressive pricing and entry barriers to boost revenue.
• High Growth: Identifying multibagger stocks involves examining the company’s performance. Top contenders show high profits, minimal debt, and strong financial management. These stocks have high earnings per share (EPS) and a low debt-to-equity ratio. Their price-to-earnings growth (PEG) ratio is also usually high, reflecting significant returns on investment.
• Excellent Management: Companies that issue multibagger stocks have skilled and experienced managers who ensure efficient production and sales coordination. 

Risks Associated With Multibagger Stocks

Investing in even the top multibagger stocks in India carries a number of risks, including:

1. Volatility: Multibagger stocks can be highly volatile, meaning the multibagger share price can fluctuate widely over short periods. This volatility can be especially pronounced in the early stages of a company’s growth, when investors may be uncertain about its prospects.
2. Limited liquidity: Many of the top multibagger stocks are small-cap or mid-cap companies, which can make them less liquid than larger, more established companies. This means that it may be more difficult to buy or sell multibagger stock at the right price.
3. Risk of failure: Not all multibagger stocks that appear to have strong growth potential will succeed in the long term. Investing in multibagger stocks carries the risk that the company may fail to live up to its potential, either due to competition, changing market conditions, or other factors.

Investors should always be mindful about their investment goals and risk appetite before purchasing any multibagger stocks; thorough research of the market conditions and stock performance often aids investors in gaining financial freedom.

Advantages of Investing in Multibagger Stocks

While investing in multibaggers can be risky, they also offer the potential for significant returns over the long term. In fact, many of the world’s most successful investors, such as Warren Buffett, Peter Lynch, and Charlie Munger, have made their fortunes by investing in the best multibagger stocks. Here are some reasons why you should consider investing in multibagger shares:

1. Higher returns: Multibagger shares have the potential to generate significantly higher returns than regular stocks. With the right investment strategy and a long-term perspective, you could potentially earn returns of 2x, 5x, or even 10x your initial investment.
2. Diversification: Multibagger shares can help you diversify your investment portfolio. Investing in a mix of the best multibagger stocks across different industries and sectors can help spread out your risk and potentially increase your overall returns.
3. Long-term growth: Multibagger shares are typically associated with companies that have strong fundamentals, innovative products, and a proven track record of growth. By investing in these multibagger stocks, you’re essentially buying into the future potential of a company.
4. Compound returns: Over time, the returns from multibagger shares can compound significantly. The higher the multibagger share price, the higher the return. This compounding effect can help grow your investment portfolio exponentially.

What are Some Alternative Investments to Multibagger Stocks?

Risk-averse investors looking to venture into the stock market can consider alternate investment options to multibagger stocks, like:

• Debt Funds: Debt funds consist mainly of company-issued debt securities. They prioritise repayment upon revenue generation and thereby reduce associated risks. Those with a low risk tolerance may find SEBI-registered debt mutual funds attractive. They incorporate government securities and liquid money market instruments for maximum returns with minimal risks.
• Hybrid Funds: Hybrid funds are also called balanced advantage funds. They seek an optimal balance between risk and return by including both equity and debt securities in their portfolios. While equity shares offer significant returns, the volatility stemming from market influences is mitigated by debt-oriented securities.
• Large Cap Funds: Unlike multibagger shares, which pose higher investment risks, large-cap funds invest in the equity securities of companies with a market capitalisation exceeding Rs. 20,000 cr.

Factors to Consider Before Investing in Multibagger Stocks

Investing in multibagger stocks in India involves carefully considering various factors to make informed decisions. Understanding the following key aspects is crucial before venturing into this high-reward, high-risk territory:

• Company Fundamentals: Evaluate the company’s financial health, management expertise, and growth prospects. Robust fundamentals provide a solid foundation for potential multibagger stocks and their returns.
• Industry Trends: Analyse the industry’s current and future trends. Investing in sectors with long-term growth potential enhances the chances of identifying multibagger opportunities.
• Market Conditions: Consider the overall market conditions and economic landscape. Bullish markets often favour long term multibagger stocks with strong fundamentals, while bearish trends may pose challenges.
• Business Moat: Look for multibagger stocks with a competitive advantage or a strong economic moat. Sustainable competitive edges can contribute to prolonged growth.
• Risk Tolerance: Assess your risk tolerance carefully. Multibagger stocks can be volatile, and understanding your risk appetite is essential to weather market fluctuations, especially when considering shares termed as multibaggers by experts.

To Wrap It Up…

Investing in multibagger stocks requires patience and discipline. It’s important to stay focused on your long-term goals and avoid getting caught up in short-term market fluctuations. Multibagger stocks often have high growth potential, and it is important to be patient when making these investments. Investors should consider all fundamentals and research thoroughly before investing in these high-risk stocks. 

Frequently Asked Questions About Multibagger Stocks