Top Multibagger Stocks for 2022

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Table of Content


  • Gujarat Mineral Development Corporation

  • Adani Power

  • Chennai Petroleum Corporation 

  • Swan Energy

  • Adani Green Energy Limited



The domestic equity market has been under immense selling pressure since the turn of 2022 and the selling intensified in the month of June. Amidst this massive selling pressure leading to a bloodbath in the stock market, a handful of stocks have emerged as multibagger stocks that have given multifold returns to their investors in June 2022. With bears holding the reins of the stock market in India and around the world, how much these top-performing stocks have delivered to their investors? The answer to this question lies in the sections to follow.

Interestingly, these multi-bagger stocks belong to the power, energy and chemical sectors. The global energy demand has been constantly on the rise since the beginning of 2022 and it has worsened due to the Russia-Ukraine war. These factors have created a favorable environment for the aforementioned sectors.

Let us find out those stocks that have delivered multi-bagger returns to their investors from January till June 2022 along with the percentage returns and other important details.

1). Gujarat Mineral Development Corporation

This is the only stock that is not a part of the Power and Energy sector that gave high compounded returns to its investors since the beginning of 2022. Even though the overall market sentiment was negative since the beginning of this year, Gujarat Mineral Development Corporation or GMDC was able to make its holders’ portfolios green. A GMDC stock was trading at INR 73.85/- at the beginning of this year. The stock prices began soaring due to a surge in the global commodity prices as a result of the Russia-Ukraine war. The stock hit its year-high price at INR 218.15/- on April 08th. The current price of a GMDC stock is INR 132.70/-. If an investor is still holding on to GMDC stocks, he/she is sitting on a profit of approximately 83%.

Here are some important parameters to assess whether or not to start investing in this company -

Parameter

Suitable for Investment (Yes/No)

Year on Year Net Income

No

Year on Year Asset Increase

No

Year on Year Free Cash Flow

Yes

Year on Year Total Revenue

Yes


2). Adani Power

Adani Group’s Power and Energy subsidiary Adani Group has emerged as one of the top multibaggers in 2022. Adani Power's share price was hovering between INR 99/- and 101/- at the beginning of January 2022 from where it reached an all-time high of INR 340.25 at the end of May. Currently, the price of a single Adani Power equity share is INR 270.60. At its current price, the stock is up by 172% from the January 2022 price.

Given below are some important pointers regarding Adani Power that will help the readers assess whether or not it is still worth investing in it -

Parameter

Suitable for Investment (Yes/No)

Year on Year Net Income

Yes

Year on Year Asset Increase

Yes

Year on Year Free Cash Flow

No

Year on Year Total Revenue

Yes


3). Chennai Petroleum Corporation

The next stock on our watchlist that has given exceptional returns to its investors is the subsidiary of Indian Oil Corporation called the Chennai Petroleum Corporation Limited. The CPCL stock price started at INR 103.30/- in January 2022 from where it touched a yearly-high of INR 379.80 on June 09th. If an investor wants to invest in Chennai Petroleum Corporation Limited, the current price of its single stock is INR 319.85. At its current price, the stock is up by 209% from the January 2022 price. The following table will help new investors to make up their minds regarding investment in it -

Parameter

Suitable for Investment (Yes/No)

Year on Year Net Income

Yes

Year on Year Asset Increase

Yes

Year on Year Free Cash Flow

No

Year on Year Total Revenue

Yes

4). Swan Energy

Another Ahmedabad-based energy company, called Swan Energy, has experienced a good rally since the beginning of 2022. At the beginning of 2022, single equity would have cost an investor INR 146.15 but now, a single share of the same will cost INR 190.15. The share price reached a year high of INR 329.15 on May 02nd. Since the start of the year, the Swan Energy stock price has returned approximately 125% returns to its investors. Now, let us check out some important details of Swan Energy that will explain if it is the right time to invest in it or not -

Parameter

Suitable for Investment (Yes/No)

Year on Year Net Income

No

Year on Year Asset Increase

Yes

Year on Year Free Cash Flow

No

Year on Year Total Revenue

No


5). Adani Green Energy Limited

The renewable energy subsidiary of Adani Group, Adani Green Energy Limited, grabbed so many eyeballs due to its recent bull run despite the market showing negative sentiments. The Adani Green Energy Limited shares started rallying at INR 1,346.90/- in January 2022 and hit their year-high price level of INR 2,970.50/- on April 18th. As of now, one share of Adani Green Energy Limited is trading at INR 1,879.35. From its January 2022 first week levels, the stock price is up by around 40%. At its yearly high levels, the stock delivered a return of more than 123%.

Some important parameters have been discussed below to help readers decide whether or not the current price of the stock is a good entry level -

Parameter

Suitable for Investment (Yes/No)

Year on Year Net Income

Yes

Year on Year Asset Increase

Yes

Year on Year Free Cash Flow

No

Year on Year Total Revenue

Yes

Although, the year 2022 so far has been a year for the bears, smart investors who had the above-mentioned stocks in their portfolios made unexpectedly good returns. Despite the selling spree that the FIIs have been on in June 2022 in addition to the Russia-Ukraine war, the aforementioned stocks outperformed astonishingly to emerge as winners in this red market.  

FAQs

1). What do “Multibagger Stocks” mean?
Ans: Multibagger stocks are those stocks that are currently undervalued but have the potential to give double or more returns. A major feature of multibagger stocks is they possess strong fundamentals.

2). How to identify the next multibagger stocks?
Ans: The following pointers are the most important factors that can help you identify the next multibagger stocks -

  • High return on capital employed and high growth potential
  • Steady increase in free cash flow and
  • Sensible capital allocation for business expansion

It has been observed that companies fulfilling the aforementioned criterion go on to become multibagger stocks in the longer run.

3). What are “Multibagger Penny Stocks”?
Ans: Stocks that are currently trading at INR 10 or below but have the potential to give good returns in the future due to their strong fundamentals and scope for business growth fall under the category of “Multibagger Penny Stocks”.

4). What is the difference between “Multibagger” and “Tenbagger” stocks?
Ans: Multibagger stocks are those stocks that have the potential to give double returns on the initial investment. Similarly, Tenbagger stocks are those stocks that have the potential to appreciate at least 10 times their initial investment. Peter Lynch, an American investor, coined the term “Tenbagger Stocks” in his book “One Up on Wall Street”.