7 Midcap Multibagger Stocks For 2022 That May Give Outsized Return
Looking to spot multibagger stocks in 2022 that will give an incredible return in the next 3-4 years? The point to understand is the next multibaggers will be those are either operating in a niche market or unorganised market where they are gaining market share from unorganised space. Below is the list of multibagger stocks for 2022 that must be on your radar for investment.
Multibagger Stocks For 2022: Carborundum Universal
Carborundum Universal is expected to benefit from increasing demand across its end-user industries such as auto, auto components, engineering, basic metals, infrastructure and power. The company’s domestic abrasives market leadership, well-diversified presence and product launches would aid profitability and give rise to healthy cash generation.
Multibagger Stocks For 2022: Ashok Leyland
Commercial vehicle manufacturer Ashok Leyland would be a major beneficiary of the commercial vehicle upcycle because of its strong brand presence. Its focus on diversifying to less cyclical businesses would help it to reduce earnings volatility. We recommend buying Ashok Leyland with a target price of Rs. 150.
Multibagger Stocks For 2022: Balrampur Chini Mill
The government’s increase in the ethanol blending mandate from eight percent to 20 percent by 2025 provides better revenue visibility and higher operating margins. The company will soon commission an additional 320,000 litres per day of distillery capacity, which will bring its total annual capacity to 840,000.
With the upcoming opportunity in the ethanol space, we expect significant growth in revenue and operating profit, which could result in a re-rating of the stock.
Multibagger Stocks For 2022: Associated Alcohols & Breweries
Associated Alcohols & Breweries Ltd is undertaking capital expenditure of Rs 110 crore for a new 30 million litres per annum ethanol plant and also planning to expand the revenue share of imported foreign liquor in its portfolio, which will improve the company’s average realization and profitability.
Multibagger Stocks For 2022: Radico Khaitan
It’s a consumer story having a market share of 60% in the VODCA segment. It has consistently surprised analysts with its performance and received many earning revisions. Its margins were impacted last year because of the high freight cost.
This is the year it will be sorted out. The company is planning to launch super-premium products across India. Their absolute volume has grown by 50% which is much higher than the industry growth. EBITDA /Bottle has increased 17 per cent from 13% because of the premiumisation of brands.
Radico Khaitan Ltd has a median price target of Rs. 1192 in 12 months by 10 analysts. They provided a high estimate of Rs. 1450 and a low estimate of Rs. 980 for the company.
Multibagger Stocks For 2022: Sequent Scientific
It has emerged as India’s largest animal health company with a presence in 100+ countries. Their manufacturing facilities based in India, Spain, Germany, Brazil and Turkey have approvals from top global regulatory bodies, including USFDA, EUGMP, WHO, TGA, among others. We offer a comprehensive portfolio across formulations, animal health Active Pharmaceutical Ingredients (API), and provide analytical services to the pharmaceutical and life sciences industry.
The best part of the company is having its knowledge and execution ability in an unregulated market which is very difficult and cost-intensive to replicate. Understanding the laws and regulations of different states and countries and wading through them is not going to be easy for any company. Sequent Scientific learnt this by incurring losses and now they are well-poised to reap the benefits of this investment.
Their investments in setting up India’s only USFDA approved greenfield veterinary API facility to provide best-in-class APIs to animal health companies worldwide are catalysing growth on the back of recent commercialisations, and the momentum is expected to be continued in coming years. Their formulations business is also performing well, enabling the company to stay ahead of the curve.
The EBITDA margin is constantly going up and Return on Capital Employed is 20.2%. Their 2/3rd revenue comes from the highly regulated market. It has also corrected by 50% in the last 6 months and is now looking attractive. The stock has largely corrected because of doubts on some minor issues in the balance sheet.
Multibagger Stocks For 2022: Tata Power
Tata Power has been a clean multibagger for 2021 and its growth has been rooted in solar/wind generation capacity, regulated power transmission/distribution. Another driver is the charging of electric vehicles, solar microgrids, rooftop solar and solar EPC.
However, regulated businesses are the source of steady earnings and cash flow. Tata Power’s March-end net debt of Rs is 36,000 crores which is 4 times EBITDA earning. The story of growth seems to be intact and it can give very good returns from the current market price.