Multibagger Alert: Midcap Gainers Over Past 3 Years

In the past 3 years, the stock market has seen many ups and downs, especially due to the pandemic.

However, as we stand in 2022, the market has shown one of the fastest recoveries of the decade. If we talk in numbers, in the past 3 years, the Nifty has risen by 46%, while the Sensex has gained 40%.

Even in such critical times, there are companies that have survived and given their investors a handsome return. Investors often call these companies multibagger stocks.

Here are the top 5 multibagger stocks in the midcap space.

#1 Ruchi Soya Industries

The first multibagger stock on our list is Ruchi Soya Industries.

The stock has grown at a CAGR of 442% in the last 3 years and 117% in the last 5 years.

Ruchi Soya is a leading FMCG company in India. It is a leading manufacturer and marketer of a wide range of edible oils, as well as a pioneer of soya meals.

It is the world's largest maker of soya meals, having a presence in upstream and downstream sectors with secured palm farms.

Ruchi Soya has agreed to buy Patanjali Ayurved's food retail business, which comprises food product manufacture, packaging, labelling, and retail trade.

The company's name would be changed to Patanjali Foods following the acquisition.

Post acquisition, the company expects its combined food portfolio to generate 18% of total sales in 2023, up from 6% in 2022.

In its latest quarterly results, the company reported a 37% increase in revenue at Rs 6.6 bn which stood at Rs 4.8 bn in March 2021 quarter.

The net profit fell by 29% to Rs. 2.4 bn which stood at Rs 3.1 bn a year ago in the same period.

#2 Tata Teleservices

The second on our list of multibagger stocks is Tata Teleservices.

The company's shares have zoomed at a CAGR of 203% in the last 3 years and 84% in the last 5 years.

However, in 2022, the stock has gone up by almost 3,000%, starting at Rs 9 in January 2021.

What does Tata Teleservices do?

The company, together with its subsidiary Tata Teleservices (Maharashtra) Limited, is a prominent provider of business digital connectivity and cloud solutions. It provides a complete array of ICT solutions for Indian enterprises.

According to media sources, Tata Sons announced that it will resurrect Tata Teleservices in a scheme known as Tata Tele Business Services (TTBS) in May 2021, catering to small and medium firms (SMEs).

Since then, the company's shares have received significant interest.

Furthermore, the corporation is looking into the 5G market to expand its operations.

In a recent move, Tata Teleservices chose to convert the interest on adjusted gross revenue (AGR) dues totalling Rs 8.5 bn to equity, resulting in the government owning 9.5% of the firm.

In the latest quarterly result, interestingly, it recorded revenue of Rs 2.7 bn with no marginal change as it stood at Rs 2.6 bn a year ago in the same period.

The company marked a net profit of Rs 1.2 bn which was the same with no significant growth over a year.

#3 Tanla Platforms

The third position on our list is secured by Tanla Platforms.

The stock has grown at a CAGR or 178% in the last 3 years and 103% in the last 5 years.

Tanla Platforms (previously Tanla Solutions) is a cloud communications company that helps companies interact with their consumers and intended recipients. It is a global supplier of A2P (application to person) messaging platforms.

It virtually has a monopoly in the OTP business.

The firm is one of the world's top communications platform-as-a-service (CPaaS) providers, processing over 800 bn interactions every year.

Several high-profile investors have joined the firm in the last year.

Aside from that, it has recently attracted a number of domestic and foreign institutional investors (FIIs). SBI Life Insurance Firm and Smallcap World Fund Inc invested in the company in June 2021.

When the stock went public in 2007 at Rs 265 a share, it nearly doubled in a year. But then followed the market crises of 2008 and 2011, which drove the stock price to as low as Rs 2 by 2013.

The company's success over the last three years has been outstanding. It was trading for less than Rs 30 back in December 2018. It has already reached a high of Rs 1,900.

Tanla Platforms announced an exclusive relationship with Kore.ai for five countries: India, the United Arab Emirates, Indonesia, Vietnam, and the Philippines.

Kore.ai is a company that provides enterprise conversational AI software platforms and solutions.

This collaboration is an important step toward providing enterprises and brands with the ability to improve the digital experiences of their key stakeholders.

In its latest quarterly result, Tanla Platforms increased its revenue by 50% to Rs 3.6 bn which stood at Rs 2.4 bn a year ago in the same period.

It reported an increase of 38% YoY in net profit with Rs 1.8 bn which stood at Rs 1.3 bn a year ago in the same period.

#4 Laurus Labs

The fourth stock on our list of multibagger stocks is Laurus Labs.

Shares of the company have grown at a CAGR of 98% in the last 3 years and 34% in the past 5 years.

Laurus Labs is a global pharmaceutical and biotechnology firm based in Hyderabad, India, with production facilities in Visakhapatnam, Hyderabad, and Bengaluru.

It focuses on active pharmaceutical components, final dosage forms, synthesis, and biotechnology.

The firm recently suggested a capex of Rs 15-17 bn split over the next two years, or till 2023, to expand its operations.

Of the stated capex, 25% would be invested in developing formulation capacities, while the remaining 50% will be committed to growing Active Pharmaceutical of India (API) capacities. The remaining 25% will be used to expand capacity to fulfill the company's contract manufacturing business needs.

The business intends to increase its worldwide market share to 25% or higher in 15 API products, up from 25% in seven now.

In its latest quarterly result, Laurus Labs marked revenue of Rs 13 bn which was the same as a year ago in the same period.

And it recorded a net profit of Rs 2.2 bn with no significant growth year over year (YoY).

#5 Trident

The fifth position on our list is Trident.

The stock has grown at a CAGR of 84% in the last 3 years and 39% in the last 5 years.

Trident Limited is a market leader in the production of Yarn Bath Linen Bed Linen Wheat Straw-based Paper Chemicals and Captive Power.

The company operates cutting-edge manufacturing facilities in Barnala (Punjab) and Budni (Madhya Pradesh). The company has a large customer in over 100 countries.

Recently, the board of directors adopted the resolution for collecting money and also suggested an enabling resolution for shareholder approval for an amount not exceeding Rs 5 bn by way of the public or private sale of non-convertible debentures (NCDs) in one or more tranches.

Despite the disturbance in the global supply chain due to the Russian-Ukraine war and the rise in raw material of global Yarn, Trident exhibited decent numbers in its March results of 2022.

In its latest quarterly result, it reported a 38%increase in revenue at Rs 18 bn which stood at Rs. 13 bn in the quarter of March 2021.

It recorded an increased net profit of 142% to Rs. 1.7 bn from Rs 750 m a year ago in the same period.

Snapshot of Multibagger stocks from Equitymaster's stock screener

Here's a quick view at the above-mentioned companies based on some crucial financial parameters.

Conclusion

While gains may appear to be attractive, markets are quite unpredictable in the near term. To stomach such volatility, one must have a very high-risk appetite.

It is usually preferable to examine a company's fundamentals than to be drawn in by short-term price surges. In this manner, the risk of the investment portfolio can be reduced.

The markets are now exceedingly volatile. As a result, you must exercise extreme caution while picking the Multibagger stocks to invest in.

Remember that opportunity can be found in the middle of any difficulty. As a result, if you invest wisely, you can benefit from the current climate.

If you do want to invest, attempt to invest for the long term to reap the most rewards.

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...