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3 quality multibagger stocks that turned 1 lakh to over 2 Cr in 20 years

A  ₹1 lakh investment made in any of these quality stocks 20 years ago would have earned you a crorepati today, according to the returns over the last 20 years of these stocks. (REUTERS)Premium
A 1 lakh investment made in any of these quality stocks 20 years ago would have earned you a crorepati today, according to the returns over the last 20 years of these stocks. (REUTERS)

  • Three stocks with multiple gains In a 20-year period, the shareholders of Godrej Consumer Products, Triveni Engineering & Industries, and Transport Corporation of India have become crorepati.

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Three stocks with multiple gains In a 20-year period, the shareholders of Godrej Consumer Products, Triveni Engineering & Industries, and Transport Corporation of India have become crorepati. The price of Godrej Consumer Products shares has risen from 4.10 on June 22, 2001 to 874.00 today at 3:30 pm, marking a multibagger return of 21,217.07 per cent. The price of Triveni Engineering & Industries' shares soared from 0.73 on July 5, 2002, to 226 as of August 5, 2022, at 3:30 pm, marking a multibagger return of 30,858.90%. Transport Corporation of India shares has increased in value from 2.50 on January 24, 2002, to 725.00 as of August 5, 2022, 3:30 p.m. IST, representing a multibagger return of 28,900.00 per cent. A 1 lakh investment made in any of these quality stocks 20 years ago would have earned you a crorepati today, according to the returns over the last 20 years of these stocks.

Godrej Consumer Products Ltd

Considering the Q1FY23 results of Godrej Consumer Products, the brokerage firm Sharekhan has said in a note that “Godrej Consumer Products Limited (GCPL) delivered yet another soft quarter with consolidated revenue growth of 8% y-o-y (volume decline of 5%) to Rs. 3,125 crore. The India business posted growth of 12% y-o-y, with personal care segment growing strongly by 25% y-o-y while homecare declined by 4% y-o-y. Internationally, Africa, the US, and Middle East businesses maintained double-digit growth momentum and grew by 12% y-o-y on CC terms, while Indonesia business stayed affected posting a decline of 9% y-o-y on CC terms. Consolidated gross margins declined by 558 bps y-o-y, while OPM declined by 407 bps y-o-y to 17% due to higher input cost inflation. EBITDA margin of India and Indonesia business registered a decline of 380 bps and 810 bps y-o-y, respectively. Operating profit decreased by 12.8% y-o-y to Rs. 532.6 crore. Adjusted PAT decreased by 16.5% y-o-y to Rs. 347 crore."

“A change in the top management and revamped strategies focuses on growth levers such as increase in penetration, cross-pollination, simplifying business in key markets and increase in distribution to drive double-digit revenue growth in the medium term. Company targets consistent improvement in OPM through premiumisation and operating efficiencies in the medium to long run. The stock is currently trading at discount valuations of 42.9x/36.7x its FY2023/24E earnings. We maintain our Buy on the stock with an unchanged PT of Rs. 959," said the research analysts of Sharekhan.

An investment of 1 lakh would now have grown to 2.13 Crore today thanks to the shares of Godrej Consumer Products' amazing 20-year return of 21,217.07 per cent. The stock is presently trading at a market price of 874, which represents a potential upside of 9.72 per cent to reach the target price set by the brokerage company Sharekhan. On a year-to-date basis, the stock has declined 8.73 per cent so far in 2022.

Triveni Engineering & Industries Ltd

Speaking about the Q1FY23 results of Triveni Engineering & Industries, Sharekhan has said in a note that “Triveni Engineering & Industries Ltd’s (TEIL’s) revenues grew by 22.5% y-o-y to Rs. 1,361.5 crore on back of 67% y-o-y growth in distillery segment’s revenues to Rs. 379.3 crore, a 17% y-o-y growth in the core sugar business to Rs. 1,051.9 crore and a 33% y-o-y increase in the engineering business revenues to Rs. 95.7 crore. Gross margins and EBITDA margins decreased by 653 bps and 509 bps y-o-y, respectively to 22.0% and 8.4%. Excluding export subsidy of Rs. 45 crore in the base quarter, the EBIDTA margin decline would be of around 100 bps. EBIT of Sugar division was down by 43.8% due to higher cane prices, higher transfer prices and lower recovery. Distillery business EBIT grew by 44.2% y-o-y. This along with higher interest expenses led to 33% y-o-y decline in the adjusted PAT to Rs. 66.4 crore. The company has commissioned new grain-based distillery of 60 KLPD in Muzaffnagar and an increase in the capacity of the existing distilleries at Muzaffarnagar and Milak Narayanpur by 40 KLPD each (from 160 KLPD to 200 KLPD), thereby increasing the company’s overall distillation capacity to 660 KLPD. Further, the company has proposed new dual feedstock facility of 450 KLPD at Rani Nangal and Sabitgarh, UP with an investment of Rs. 460 crore. Its distillation capacity will stand augmented at 1,110 KLPD by Q3FY2024."

“With higher capacity utilisation in the expanded distillery facility and improved order book in engineering, TEIL is well poised to achieve strong double-digit earnings growth over FY2022-FY2025. Further, the company is focusing on enhancing shareholders’ value by unlocking value in the non-core investments. Stock trades at 16.3x/13.2x its FY2023E/FY2024E EPS (12.6x/10.1x its FY2023E/FY2024E EV/ EBITDA). Structural change in sugar industry, strong growth prospects of distillery business, and lean balance sheet will help maintain strong growth momentum in the medium to long term. We maintain our Buy recommendation on the stock with a revised price target (PT) of Rs. 285," said the research analysts of the broking firm Sharekhan.

The shares of Triveni Engineering & Industries Ltd. have had a staggering multibagger return over the past 20 years of 30,858.90%, meaning that an investment of Rs. 1 lakh was placed in this stock 20 years ago would today be worth Rs. 3.09 Cr. The stock is presently trading at a market price of Rs. 226.00, representing a potential upside of 26% to achieve its target price set by the brokerage. On a YTD basis, the stock has gained 0.83 per cent so far in 2022.

Transport Corporation of India Ltd

In light of the Q1FY23 statistics, the brokerage firm Sharekhan has said in a note that “Transport Corporation of India (TCI) reported better-than-expected consolidated revenues of Rs. 903 crore (up 29.7% y-o-y, up 0.6% q-o-q) during Q1FY2023 led by low base along with sustained demand momentum from Q4FY2022. All three key verticals viz. Seaways (revenues up 32.5%, driven by higher freight rates), SCM (up 33.5% y-o-y, led by auto sector demand revival) and Freight (up 30.8% y-o-y, although down 3.6% q-o-q led by MSME slowdown) fared well. However, consolidated OPM at 11.5% (down 177 bps q-o-q) was lower than our estimate of 12.9%. All three verticals viz. Seaways (rising input costs), freight (lower LTL mix) and SCM (inability to pass thru higher fuel costs in large accounts) felt sequential pressure on OPM. Overall, consolidated operating profit/net profit rose by 37%/66% y-o-y at Rs. 104 crore/Rs. 78 crore. The management retained its topline and bottom line growth guidance of 10-15% y-o-y for FY2023 conservatively factoring a bit of slowdown towards the fag end of the fiscal year. Its Capex plan of Rs. 300 crore remains unchanged although it is yet to zero in on a ship for acquisition."

“TCI’s multi-modal capabilities are expected to benefit it from the logistics sector’s growth tailwinds led by GST, government thrust on schemes such as Atmanirbhar Bharat, PLI-led manufacturing push, and global supply chain re-alignments. The seaways division is expected to sustain strong performance led by increased freight rates although gradual normalization of OPM is expected. The addition of one more ship would be keenly awaited and provide further fillip to its seaways division. We expect TCI to be on a long-term growth trajectory, driven by positive sectoral fundamentals and its inherent strengths and capabilities. We retain our Buy rating on the stock with a revised SOTP based target of Rs. 850 lowering our valuation multiples to factor in the near-term macro headwinds affecting especially the MSME segment," claimed the research analysts of the broking firm Sharekhan.

An investment of 1 lac placed in Transport Corporation of India Limited shares 20 years ago would now have grown to 2.9 Cr thanks to the stock's staggering multibagger return of 28,900.00 per cent over the past 20 years. The stock is presently trading at a market price of 725.00 per share, which shows a potential upside of 17.24 per cent to achieve its target price of 850 as set by the brokerage. On a year-to-date basis, the stock has declined 0.81 per cent so far in 2022.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.

 

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