Top 5 Multibagger Stocks of 2022

The stock market hasn’t been kind to the investors for the last few months, especially after the Russia-Ukraine conflict. The volatility is at its best. And, even the most reputed stock analysts are wary of any suggestions, thanks to the bears who have dominated the index during the period.

If you see the last week’s (29th April) closing, the nifty 50 witnessed a fall of a whopping 691 points in 4 working days of stock exchange India. It’s a clear indication that the bears are giving a hard time to the bulls.

If the above discussion has scared the wits out of you, let us tell you we don’t mean to frighten you. In fact, we have come up with some positivity here. Presenting to you are the top 5 multibagger stocks of 2022 that even survived the Russia-Ukraine war litmus test. 

What are multi-bagger stocks?

The term multibagger refers to a stock whose price grows multiple times from purchasing. These can be undervalued stocks with strong fundamentals and can deliver multiple times returns on the investment.  Multibagger stock boast of strong corporate governance, with highly scalable businesses within a short period.

The essential features of a multibagger are:

Low-debt: A multibagger stock is a Zero to a low-debt company. While the definition of a low-debt company differs from industry to industry, a debt that is below 30 percent of the equity value is considered healthy.

Sources of earnings: Check the sources that add the most to the company’s revenue. If the revenue segment appears to be growing at the macro level and the operations look easily scalable, the stock may deserve to be a multibagger in the times to come.

Quarter-on-quarter performance: Keep an eye on the company’s revenue multiples on a QoQ basis. Low multiples may hint at a significant upside potential for the company.

Earnings and price multiples: Check the current PE and price/sales ratios based on the trailing 12-month EPS and revenue. Faster growth in the PE level over the stock price indicates becoming a multibagger.

In addition, the management background, business model, and annual reports may also have a significant impact on stock growth.

Top 5 multi-bagger stocks of 2022

Here is the list of the top 5 multibagger stocks of 2022 that were in green amid the red sea of the Indian stock exchange:

Khaitan Chemicals and Fertilizers

NSE: KHAICHEM

BSE: 507794

Look at this graph, the stock was trading at INR 151 on 12th April 2022, a whopping 132 percent higher than its price on 3rd January 2022 (i.e. 65.55). Khaitan Chemicals and Fertilizers boasts of a high Piotroski Score (8), which means the company has strong financials. Also, the company is known for posting strong annual EPS growth (positive change between earnings per share values).

The ROE and ROA have improved for the company over the last two years. And it is a low-debt company.  However, the lack of price momentum, as suggested by technical indicators appears to be a problematic zone for the company.

Even after the unfortunate fall of the market over the last week, the stock is giving over 77 percent returns in just four months. Doesn’t that qualify for a multibagger stock of 2022?

You can express your views in the comments section. 

Gujarat Ambuja Exports Limited

NSE: GAEL
BSE: 52422

The stock started its run from INR 166.60 on January 3 in 2022 and hit the 361.70 mark on April 22, a whopping 116 per cent hike in less than four months. And at a time the market has succumbed to global pressure, the stock is sitting pretty at INR 289 (accounting Monday’s fall of over 7 per cent). The stock looks to regain its rally once the market starts to consolidate.

The company has a strong annual EPS growth, with revenue witnessing a persistent increase every quarter for the past two. The company has also generated profit by effectively using its capital over the last two years. It’s again a low-debt company with zero promoter pledge. And no wonder the company has seen increased shareholding from FII / FPI or Institutions. However, the declining net profits (YoY) and operating profit margin may be a problem for the company.

Bharat Dynamics

NSE: BDL

BSE: 541143

Starting its dream run this year from INR 391.45, the stock was trading at INR 659 on May 9, 2022, around 69 percent growth in just four months. The stock hit its peak this year at INR 855.30 on April 18, 2022, before becoming a victim to the bloodbath the indexes across the world have experienced over the last 15 days. 

Talking about the good things, the company boasts of quality management, consistent financial performance, and strong technical momentum.  On the flip side, the negative breakdown second support (LTP < S2) hints at a bearish reversal pattern. 

Meghmani Finechem Ltd.

NSE: MFL

BSE: 543332

This is one of those rare stocks this year, which has held its flight even amid the global and domestic turbulence. An unbelievable 74 percent returns in just 4 months and that’s too amid testing times make it truly a multibagger.

The company has delivered growth over 20 percent in one month, attributed to increased shareholding by FII / FPI or Institutions. Also, the recent results have shown strong QoQ EPS Growth. Increasing QoQ profits over the past 4 quarters backed by a zero promoter pledge gives the company an edge over its peers.

But decreasing shareholding by promoters and a low Piotroski score require attention.

BLS International Services

NSE: BLS

BSE: 540073

BLS International Services is another company that has held investors’ faith in the otherwise sinking market. The stock has managed to maintain its momentum even in not-so-friendly conditions. As of May 9, 2022, BLS is offering around 79 percent returns to those who have bought it at INR 189.45 on January 3, 2022.

Despite today’s 6+ percent crash, the crossover of MACD above signal line (a bullish pattern) is a relief for investors. The best thing is the company is debt-free and has witnessed an increase in QoQ revenue for the past 3 quarters. However, the potential investors should watch out for inefficient use of shareholder funds and poor cash generation from the core business for the past 2 years.

Conclusion

So, we conclude our discussion with these 5 high-yielding stocks for the year 2022. We hope you would like to dig deeper into these. For more such useful information, we have for you INVESTING KA SEARCH ENGINE, Ticker by Finology, where we give you tools based on Stock Analysis, Peer Comparision, Stock Bundles, and many more.

Also, if you want to know more about a specific stock or other related information, you can write to us at support@finology.in

Be it feedback, suggestion, or a request, you can share it in the comment section. We would love to read that and reply to it. Meanwhile, keep making profits.

*Disclaimer the stocks discussed above are here to make you understand the concept and are not the recommendations of Finology.