The stock market is the favorite place of investors. If you buy 10 stocks and even one becomes a multi-bagger - you have emerged a winner. Multibagger stocks are like rare gems that have the potential to multiply your investment 10x and even 1000x times over.

Let's explore the top three stocks that have the potential to become a multi-bagger stock in India.

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• Trent Ltd

Trent Ltd is a retail company that sells various products such as clothing, shoes, accessories, toys, games, food and groceries.

Trent Ltd is a part of Tata Group and has been growing a number of retail chains, with a focus on fashion. Some of the brands in the fashion segment are Westside and Zudio.

In the fiscal year 2024 (FY24), Trent Ltd runs 875 stores, up from 681 in FY23. Here’s a brief overview of the fashion retail outlets.

Trent Ltd also partners with Zara and Massimo Dutti. Trent holds a 49% stake and the Spanish Inditex group owns the remaining 51%. This collaboration created 23 Zara stores in 12 cities and 3 Massimo Dutti stores in 2 cities. They have revenue of Rs 2,870 crores for FY 2024.

On the grocery front, Trent Ltd operates the Star retail format, which has 66 stores in 10 cities. Each Star store features branded products, like Fabsta, Klia, Skye, and Star.

Over the years, Trent has created brands that connect well with customers and meet the requirements of varied fashion tastes. Trent has a customer base of 9 million WestStyle Club members, which is a valuable advantage for the company.

Although gross profits increased slightly by about 0.6% compared to the previous year, there was a marked increase in EBITDA margins by 3.3%.  Most of its brands are profitable and Trent's price will likely shoot up in multifolds.

• Action Construction Equipment (ACE) Ltd

Action Construction Equipment Ltd is a leading manufacturer and marketer of equipment for construction, material handling, road building, and agriculture.

Some of their products are hydraulic mobile cranes, mobile tower cranes, forklifts, backhoe loaders, compactors, motor graders, tractors, harvesters, and rotavators.

They focus on expanding their sales network by increasing exports and tapping into the defense sector. They export their products to 37 countries.

ACE is the largest manufacturer of Pick & Carry Cranes in the world. The company holds approximately 63% of the mobile cranes market and around 60% of the tower cranes market within India.

In the first nine months of the FY 2024- cranes contributed 70% to the revenue, construction equipment contributed 14%, agriculture equipment contributed 10% and material handling equipment contributed 6%.

The company has some notable clients like Larsen & Toubro (L&T), Tata, Ashoka Buildcon, Aditya Birla, ACC, Dabur, Novartis, HP, BHEL, Coal India, RITES, Indian Oil, BEML, Adani, and Reliance.

Action Construction Equipment has secured a tender for setting up an assembly plant in Ghana for manufacturing tractors, backhoe loaders, and agricultural implements - worth USD 24.98 million.

ACE has a market cap of Rs 17,222 crores. Over the past three years, ACE has achieved compounded sales growth of 33% and profit growth of 63%. Its ROCE stands at 36.99%. With strong market leadership and strategic initiatives, ACE is well-positioned for multi-bagger growth.

• Kalyan Jewellers India Ltd

Kalyan Jewellers India Ltd designs, manufactures and sells gold jewelry pieces in different price ranges.

As of the fiscal year 2020 (FY20), it is one of the largest jewelry retailers in India based on revenue. Kalyan Jewellers is part of the top five gold jewelry retailers in India and holds 6% of the organised market share.

Kalyan Jewellers uses a hyperlocal business model to tailor its offerings to the unique tastes and cultural preferences of different regions. The company works with local artisans as contract manufacturers and operates 13 procurement centers in key jewelry manufacturing areas.

Kalyan Jewellers offers wedding jewelry under the brand Mahurat. They have exclusive gold pieces, uncut diamonds, precious stones, and diamond jewelry for weddings.

The company's sales comprise 73% of gold jewelry and 25% of studded jewelry. From FY22 to FY24, Kalyan Jewellers' consolidated revenue grew by 46%, driven by higher same-store sales growth and the addition of new stores.

In FY25, Kalyan Jewellers plans to open 80 new Kalyan showrooms, 50 Candere showrooms, and six new showrooms overseas which means it is all set to become the next Titan.

Conclusion

Trent Ltd, ACE Ltd, and Kalyan Jewellers show strong growth and market leadership making them promising multibagger stocks.

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