Data showed every third BSE100 stock has delivered a simple return of 20 per cent or more over the past three years NSEBSETVS Motor
PEER COMPANIESPetronet LNGNTPCMaruti SuzukiL&TJM FinancialITCInfosysIndusInd BankICICI bankHPCLHDFC bankEicher MotorsCiplaBritanniaBPCLBharat ElectronicsBajaj FinServBajaj FinanceBajaj AutoAshok LeylandAmbuja CementsEXPAND TO VIEW ALL NEW DELHI: If you thought only midcaps and smallcaps can deliver multibagger returns, think again.
There might be enough opportunities in the largecap space that failed to catch your attention.
While some largecap stocks that have put up a strong show over the past few years could be on the verge of breaking the myth, old economy companies could be transforming their businesses to the next stage of growth. Such stories are not to be missed.
Data showed every third BSE100 stock has delivered a simple return of 20 per cent or more over the past three years, while one in every four stocks from the index has become a multibagger, delivering anywhere between 100 per cent and 640 per cent returns.
Shares of Bajaj Finance have zoomed 125 per cent so far this calendar and 641 per cent in last three years. This scrip will be included in the Nifty50 index from September 29.
“It has been an enormous run for this stock. I was at Rs 1,800 when the company gave a bonus and post-bonus it has come back to the same level. It doubled in a year and reached Rs 100,000 crore market-cap. They are only 29 listed companies in India that have a market cap higher than this. From a fundamental point too, I am a little jittery saying this: but it is a great story. Technically, it is fantastic one,” said Deepak Shenoy, Founder, Capital Mind.
Bajaj Finance and Bajaj Finserv are known trades. Bajaj Finserv is up 96 per cent this calendar. This stock has rallied 432 per cent in last three years and over 630 per cent in five.
Brokerages have noted that a strong set of numbers and significant value discovery in life insurance and general insurance businesses over the past few quarters have lifted the stock. But from its current valuation, upside for this stock could be limited, they said.
Another stock to be included to Nifty50 index is HPCL. The company has given a guidance for Rs 7,100 crore capex in FY18 compared with Rs 5,900 crore in FY17 and Rs 61,000 crore cumulative capex over 2017-2021.
Some analysts project the company to report gross refining margin at $6.5 a barrel over FY18/FY19 and increase marketing multiple to 4 times (from 3.5 times earlier). This stock has risen 324 per cent in last three years.
Piramal Enterprises, Indiabulls Housing and Britannia Inds are some of other stocks that have gained over 200 per cent.
Yes Bank, IndusInd Bank, TVS Motor, Ashok Leyland, Bharat Electronics, Maruti Suzuki, Eicher Motors, Petronet LNG, BPCL and Marico are some of the other top performing largecaps that have gone up between 125 per cent and 190 per cent in last three years.
Foreign brokerage CLSA believes that Nifty earnings could grow in double digits from September quarter onwards, after remaining stranded at 2 per cent CAGR over the past five years.
“Strong, sustainable domestic equity inflows should continue to support rich valuations in the market,” it said. ICICI Bank, IndusInd Bank, L&T and Ambuja Cements are among its top picks.
JM Financial has included largecaps such as Bajaj Auto, Bajaj Finance, Bajaj Finserv, Cipla, HDFC Bank, ICICI Bank, IndusInd Bank, Infosys, L&T and NTPC into its model portfolio.
Brokerage Sharekhan prefers HDFC Bank, IndusInd Bank, ITC, Maruti Suzuki, Power Grid Corp and Reliance Industries among its top largecap stocks.