Five stocks that turned Rs1 lakh into Rs1 crore6 min read . Updated: 08 Sep 2021, 10:19 AM IST
- Patience is one of the biggest virtues you need to have if you want to become a crorepati in the stock market
Investors are always on a quest to find the next big thing in the markets.
Finding stocks that can multiply many times their original cost of investment, commonly referred to as multibaggers, is the holy grail for many investors.
But to find and own such stocks, one must remember that money is not in buying and selling, but in holding.
Renowned investor and billionaire Warren Buffett was quoted as saying,
If you aren’t thinking about owning a stock for ten years, don’t even think about owning it for ten minutes.
He strongly believes that one should hold their investments for a longer period of time to witness the taste of compounding.
In the last decade, stock market has thrown up multiple opportunities in front of investors to become a millionaire or even a billionaire.
Those who were sitting tight and holding high-quality stocks during tough times would have earned massive returns on their investments.
Let’s take a look at the list of stocks that have turned ₹1 lakh of investment into more than ₹1 crore in the last 11 years.
1. Avanti Feeds
Avanti Feeds (AFL) has marked its presence in the field of aquaculture by engaging in manufacturing high-quality feed for shrimps, operating the Vannamei hatchery, and processing and exporting shrimps.
In April 2010, Avanti Feeds’ share price was at ₹1.6 per share and currently the stock is trading at ₹562. The company has delivered returns of 35,019% in the last 11 years.
One lakh invested in the year 2010 would have become ₹3.5 crore.
In the last 3 months, mutual fund holding of the company has increased by 1.28% to 4.28%, while in the same period foreign institutional holding of the company has almost stayed constant.
On the financial front, Avanti Feeds June 2021 quarter results disappointed on profitability. An increase in raw material cost in the shrimp feed division hit the profitability of the company.
In fiscal 2021, shrimp feed consumption in India declined compared to the previous year.
On a positive note, despite disruption due to Covid-19 led lockdown, the company managed to maintain its market share in the shrimp feed business to 48-50%.
Avanti feeds is a smallcap company with market capitalisation of ₹76.4 bn.
2. Bajaj Finance
Bajaj Finance is mainly engaged in the business of lending.
It has a diversified lending portfolio across retail, small and medium enterprise (SME) and commercial customers with a significant presence in urban and rural India.
It also accepts public and corporate deposits and offers variety of financial services products to its customers.
The company’s price has shot up from ₹33 per share to ₹7,508 till date, logging around 22,652% rise in the last 11 years.
If you had invested ₹1 lakh in the company, it would have become ₹2.3 crore at the current valuation.
In fact, over the last one year, Bajaj Finance has given a return of 108% on the BSE. The company is growing at compound annual growth rate (CAGR) of 61% over the last 10 years.
For the June 2021 quarter, the company’s net profit was marginally up by 4% year on year (YoY). Its asset quality remained under pressure as the gross non-performing assets (NPA) and net NPA increased during the quarter.
Bajaj Finance belongs to largecap space and recently hit ₹4 tn in market capitalisation.
3. Atul Limited
Atul is a diversified and integrated Indian chemical company (a part of Lalbhai Group, Gujarat).
The products of the company are used in various Industries and come mainly under two segments, life science chemicals and performance and other chemicals, under 9 businesses.
Over the last 11 years, the company has given stellar returns of 10,097%. In 2010, the price of the stock was at ₹91.3. It’s now trading at ₹9,309 on the BSE.
If an investor had invested in this counter after the global slowdown in 2009 or say around 11 years ago, ₹1 lakh would have become around ₹1 crore.
For the last 10 years, the company is growing at a CAGR of 45%.
The domestic chemical Industry has multi-year tailwinds like global companies shifting to India for raw material sourcing along with initiatives taken by the government to promote the domestic industry.
This will help strong companies like Atul in the sector to show consistent and profitable growth.
The company belongs to midcap space with a market cap of ₹272.7 bn.
4. PI Industries
PI Industries is a leading player in the agro-chemicals space having strong presence in both domestic and export markets.
It has state-of-art facilities in Gujarat having integrated process development teams with in-house engineering capabilities.
The company’s shares has delivered return of over 10,900% in the last 11 years. PI Industries share price which stood at ₹31 in April 2010 rose to ₹3,410 during the period.
An investment of ₹1 lakh in this stock in 2010 would now have turned to ₹1.1 crore.
The past year has been particularly good for PI industries as the stock has gained 82%. In comparison, the benchmark Sensex gained 51% during the last one year.
For the last few months, mutual fund and foreign institutional holding of the company has almost stayed constant.
PI Industries is a largecap company. Currently, its marketcap stands at ₹519 bn.
5. Astral Poly Technik
Astral Poly Technik is engaged in the production of plastic products. The company and its subsidiaries are engaged in the business of manufacturing and trading of pipes, fittings, and adhesive solutions.
The stock of Astral Poly Technik has delivered handsome returns for its investors during the last 11 years.
The company’s share price has zoomed from ₹12.6 in April 2010 to ₹2,117 on BSE. Over the years, it has managed to give a return of 16,701%.
Investment of ₹1 lakh in the Astral Poly Technik stock 2010, would have returned ₹1.7 crore today.
Over the last 5 years, the company’s market share has increased from 5.1% to 6.39%.
On the financial front, Astral Poly posted net profit of ₹739 m for the period ended 30 June 2021, up 271.4% against ₹199 m for the same period last year.
Astral Poly Technik belongs to midcap space with a market cap of ₹422bn.
How to identify multi-bagger stocks
As a retail investor, if you are looking for multi-bagger stocks in India, you should weigh in all the pros and cons before investing in any company.
The goal of an investor should be to look for a good investment and not necessarily a multibagger. This is because you need to have a thorough process for investing that meets all your criteria.
If you go in with the assumption that every stock you invest into will be a multibagger, you will be disappointed. It won't work out that way.
The future is uncertain. Your rationale for buying a stock may change and you will have to watch out for that.
The idea should be to buy a good quality stock of a company, look out for a business that has a solid foundation, sound growth strategy, attractive valuations, ethical business practices, and exceptional management team.
As long as these factors are in place, you should remain invested for the long haul rather than being agitated by short term market volatility and price fluctuations.
(This article is syndicated from Equitymaster.com)
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