If you try and look back at the multibagger stocks of 2017, there are a plethora of mid-cap stocks that have done over 1000% in the mid cap space. Even at a time when the Nifty has returned around 28% for the full year, there are a good number of A Group stocks that have given more than 100% returns. How exactly do we look at multi baggers? Obviously we will have to look at mid cap stocks and A group stocks separately. Let us look back at multibaggers for 2017 India. It is interesting to understand not just the returns on these stocks but also the multibagger stocks history. Even in case of mid-cap stocks that have given multibagger returns there are obviously stocks that have a genuine story behind them. Let us look at a few such multibagger stocks of 2017. We shall focus on 1 year returns and not look into the longer term at this point of time..
Multibagger mid-cap stocks in 2017..
If you were to sort the list of mid cap multibagger stocks, some of the returns were purely mind-boggling. Let us look at some specific stories among the mid-cap multibagger stocks..
HEG and Graphite India: As steel production and steel capacity expansion started picking up in India after a favourable government policy, the two companies to benefit the most were Graphite India and HEG. Both the companies are leading manufacturers of graphite electrodes that is an essential component for electric arc furnaces that turn scrap into steel. As global steel makers ramp up, demand growth recovers across India and the world and these two companies have been the biggest beneficiaries in the last 1 year. For example, HEG delivered returns of 1377% last year while Graphite delivered 995% returns in the last one year.
Indiabulls Ventures and Weizmann Forex: Both the stocks benefited from a genuine turnaround in financial performance during the last year. Indiabulls Ventures saw its profits jump 23 times as it got its financial act together and benefitted from the big savings shift. Weizmann Forex, a forex service provider, also saw its profits zoom by more than 100%. Both the stocks also benefited from the turnaround in the fortunes of the financial sector in India. While Indiabulls Ventures rallied by nearly 1085%, Weizmann Forex was up by 716% in the last one year.
Yuken India and Rain Industries: Both these companies have benefited substantially from a turnaround in their order book positions. Yuken India has a technical collaboration with Yuken of Japan and is the preferred supplier of hydraulic motors in India. The company has also set up a foundry to supply high quality castings and the order book is overflowing as the capital cycle shows signs of turning around. Rain Industries based out of Hyderabad is another big beneficiary during the year. Rain has benefited substantially from the deficit of calcined pet coke (CPC) and coal tar pitch (CTP). Both are used extensively in the aluminium industry the world over. Analysts have already warned that the supply of pet coke will be insufficient to meet the smelter demand in the next few years. During the last 1 year Yuken has given a return of 756% while Rain Industries delivered returns of 672%.
Frontline multi bagger stocks in 2017..
When it comes to large cap stocks it is hard to find stocks that delivered returns like the mid-cap stocks. Hence we have considered 100% as the cut off returns for being a potential multibagger..
Indiabulls Real Estate and DLF: These are two marquee names in the real estate space. The story was not just about the implementation of RERA or demonetization or greater earnings visibility. Both the companies made a genuine effort to restructure their operations making themselves lean and mean in the process. Indiabulls Real Estate separated its commercial and residential business with the idea of getting foreign partners and also reducing its debt. DLF struck its big deal with GIC of Singapore to take a stake in the commercial rental business of DLF. Both the companies are looking to reduce their debt and restructure their operations to make themselves more shareholders friendly. While Indiabulls Real Estate delivered returns of 179% in the last 1 year, DLF delivered 105% returns.
Tata Global and Titan: Two marquee names from the Tata fold were among the top performers and both operate in the consumer space. The year saw a sharp rise in the consumer profile of the jewellery company and the food business. With Chandra taking over at the helm of Tata Sons, the focus will be on how the group gets restructured and both these companies could be the big beneficiaries. While Titan delivered 173% returns, Tata Global Beverages delivered 151% returns during the last year.
Jet Airways and Jubilant Foodworks: In case of both these companies the 1-year outperformance came despite a very tough operating environment. Jet Airways gave a return of 133% despite crude oil moving up to $68/bbl. Jubilant Foodworks gave 122% returns despite a very marginal improvement in same store sales. Essentially, investors are looking at both these stocks as a prime consumer play. As income levels increase and spending power grows, these could be the big winners and that is what the markets have bet on.
So, that in a nutshell is the summary of 2017 in terms of multibagger stocks. Of course, we left out many penny stock multi-baggers for obvious reasons. The message was quite clear that where there is financial numbers and a big potential, there can be multibagger stocks in any kind of market!