Stocks that give returns that are several times their costs are called multibaggers. These are essentially stocks that are undervalued and have strong fundamentals, thus presenting themselves as great investment options. Multibagger stock companies are strong on corporate governance and have businesses that are scalable within a short span of time. Let’s talk about how to find the multibagger stock later on we will move towards the Tata Group Multibagger Stock.

What is multibagger stock ?

• A stock that doubles its price is called two-bagger
• If the price grows 10 times then it is a 10-bagger
• Multibaggers are stocks whose prices have risen multiple times their initial investment values.

How to find multibagger stock ?

In order to find out the multibager stocks there are certain checklist parameters one should check before investing a large chunk of money. If all the parameters are good for a particular company then forget the money that you have invested. Sit tight & just watch how it grows.

Parameters to check for the multibagger stock

1. Business model– The company should have great future potential & a great demand with respect to the market & the business model
2. Debt to Equity ratio– Debt level of the company should be within reasonable limits: There are no defined levels per se for debt, as it will vary from industry to industry. However, as a ballpark measure, debt should not be more than 30 per cent of the equity value
3. Financial Performance– Keep a check on the companies revenues & the net profit over the past 3-5 years. It must be on the continuously increasing side. Companys revenue & net profit must increase Year on Year.
4. Market Cap- In order to get the multibagger returns, one have to invest when the company is small-cap or mid cap, in large cap the chances are really less though the large cap stocks can give you CAGR of 15-25%. But smallcap/midcap have the potential to give CAGR of 20%-40%
5. Undervalued Stock- Just  by looking at the Price to earning ratio will not give you the proper idea about it. Current PE should be at either lower than median PE of the last 3 years/5 years.

Tata Group Listed Companies

There are a total of 26 listed Tata Group companies in the stock market. Data Source- Link

1. TCS
2. Tata Steel
3. Tata Chemicals
4. Tata Elxsi
5. Trent
6. Tata Communications
7. Tata Power
8. Indian Hotel
9. Tata Motors
10. Titan Co
11. Voltas
12. Rallis India
13. TRF
14. Tata Invest Corp
15. Automot. Stamp&Assem
16. Tata Technologies
17. Oriental Hotels
18. NELCO
19. Benares Hotels
20. Tata Consumer Produc
21. Tata Teleservice(Mah
22. Artson Engineering
23. Automobile Corp.Goa
24. Tejas Networks
25. Tayo Rolls
26. Tata Motors – DVR

But in order to find the multibagger we have to look out for those sectors which could give maximum potential returns as per the global economy.

In order to gain the multibagger returns from a stock/company we have to invest in the small cap companies & so that these companie will give multibagger returns if the company grows from a smallcap to a midcap or a large considering the fact that we should keep invested for a longer period of time.

Based on the above mentioned parameters to check for the multibagger stock, taking Titan as an proven multibagger stock as an example.

Titan Company Limited

It is engaged in offering watches, jewelry and others. The Company’s segments include Watches, Jewellery, Eyewear.

Titan Snapshots

• In last 20 years Titan has given 98,137% returns to their investors.
• If 10k invested in 2003; in 2024 it would have became 98.10 Lakhs (close to 1 crore)
• Market cap of Titan is 3,37,518 Cr, in order to make your money double market cap should be doubled which in case of Titan it will take 4 year approx.
• Titan fulfills all the parameters about the multibagger stock because main thing is the fundamentals of the company, Profit & loss Statement, Business model, Multiple revenue sources (Watches, Jewellery, Eyewear)
• Ace investor Rakesh Jhunjhunwala is alreday invested in Titan from last 17 years, he saw the potential that nobody could see. He holds around 14,884 Cr worth of shares of Titan which is his biggest investment in a particular company

Tata Motors Ltd

Tata Motors Snapshots

• In last 23 years Tata Motors has given 2,190% returns to their investors.
• If you would have invested 10k in 2000 then as on date 2024 it would have been 2.29 lakhs
• Tata Motor market cap is 3,63,351 Cr
• Tata Motors fulfills the parameters to consider for a mutibagger stock except the debt part. Debt to equity ratio is 2.3 which is on a higher side.
• March 2020 was the right time to invest in Tata Motors because the share was trading at 60 level & now it has gone more than 900 levels.
• Ace investor Rakesh Jhunjhunwala is alreday invested in Tata Motors from last 4 years, he invested during the time of COVID.

Tata Consultancy Sercives

Tata Consultancy Services is the flagship company and a part of Tata group. It is an IT services, consulting and business solutions organization.

TCS Snapshots

• In past 20 years TCS has generated 3087% returns to their investors.
• 10k invested in 2004 would have become 3.18 lakhs in 2024.
• TSC market cap is 14,02,279 Cr.
• TCS is considered as the cash cow of the Tata Son’s because of its continuous increase in its profits
• Since it has became a large cap stock so there will be gradual increase in the share price in the future for the TCS stock.

Voltas Ltd

Voltas is engaged in the business of air conditioning, refrigeration, electro – mechanical projects as an EPC contractor both in domestic and international geographies

Voltas Ltd Snapshots

• In past 21 years Voltas Ltd has given 23,181 % returns to their investors.
• 10k invested in 2003 would have become 23.20 lakhs in 2024
• Volta Ltd market cap is 36,515 Cr.
• Company has been maintaining a healthy dividend payout of 57.2%

Check out this – Varun Beverage Fundamental Analysis

Disclaimer

This article is a complete guide about Aavas Financiers Ltd.
These information and forecasts are based on our analysis, research, company fundamentals and history, experiences, and various technical analyses.
Also, We have talked in detail about the share’s future prospects and growth potential.
Hopefully, this information will help you in your further investment.
If you have any further queries, please comment below. We will be happy to answer all your questions.
If you like this information, share the article with as many people as possible.