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34,000% returns in 10 years! Themes that delivered last

decade but haven't run out of steam yet
Analysts like Deepak Jasani of HDFC Securities is bullish on internet-based
themes.
By Rahul Oberoi, ETMarkets.com | Updated: Jan 02, 2020, 03.56 PM IST

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“Focus on the company management. Good managers in a bad business are better than bad managers
in a good business. An investor should chase the story behind his investment, not the money on the
table. Money can make you rich, but the story can make you wealthy,” Vijay Kedia said.

Once again the New Year begins with hopes that portfolio returns will be better, and the market will
broaden to throw up more opportunities.

Government’s policy decisions and people’s changing tastes usually result in a makeover of systems as
well as businesses. You need an eagle eye to spot these trends on Dalal Street.

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Themes like processed food, pharmaceuticals, NBFCs, consumer goods, pesticides, plastic products,
footwear, consumer durables and chemicals produced multibagger stocks on Dalal Street over the past
decade, with some stocks rallying up to 34,000 per cent.

Avanti Feeds rallied nearly 34,200 per cent to Rs 569.30 as of December 30, 2019, from just Rs 1.66 on
December 31, 2009. Had you invested Rs 1,00,000 on this stock on December 31, 2009, it would have
become Rs 3.43 crore today, growing at a CAGR of nearly 79 per cent annually. A similar investment in
pharma player Caplin Point Laboratories would have become Rs 1.85 crore.

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Others on the list of top 12 multibaggers of the last decade were Bajaj Finance (up 13,131 per cent),
Safari Industries (up 8625 per cent), Bharat Rasayan (up 8,337 per cent), Astral Poly Technik (up 8,005
per cent), Arman Financial Services (up 7,090 per cent), Relaxo Footwears (up 6285 per cent), Symphony
(up 6185 per cent), Ajanta Pharma (up 6004 per cent), Fairchem Specialty (up 5,148 per cent) and Tasty
Bite (up 4897 per cent), which multiplied money by over 50 times during this period.

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The above data shows that picking the right stock from the right sector is key to success on Dalal Street.
However, it is not an easy task to get that selection right.

Srinivas Rao, Ravuri, CIO for Equity at PGIM India Mutual Fund, is bullish on pharmaceuticals and
chemicals sectors. “Pharma sector valuations have corrected and the sector is now trading in line with
Nifty,” he said.

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From the chemicals space, Atul, Paushak and Jyoti Resins & Adhesives soared 3,000-4,350 per cent over
the past 10 years.

Sampath Reddy, Chief Investment Officer, Bajaj Allianz Life Insurance, believes the pharma sector has
bottomed out and selective opportunities have emerged, as valuations have become quite reasonable.
“Even in the consumer sector, in spite of rich valuations, one can find few opportunities to invest for the
long term,” he said.

Besides Caplin Point and Ajanta Pharma, shares of Natco Pharma, Hester Biosciences, Abbott India,
Granules India and Medicamen Biotech have jumped over 1,000 in last 10 years.

Analysts like Deepak Jasani of HDFC Securities is bullish on internet-based themes, which were not
available for investment in 2009.

Rusmik Oza, Senior Vice-President and Head of Fundamental Research at Kotak Securities, prefers larger
non-banking finance companies after the liquidity crisis and also big housing finance players with strong
parentage.

Shares of Bajaj Finserv, Apollo Finvest and Cholamandalam Investment & Finance Company, Capital
Trust, Ugro Capital and Dolat Investment rallied over 1,000 in last 10 years.

Consumer discretionary is another space that hasn’t lost its charm for analysts. “We like Titan, Page,
Crompton Consumer, Trent in the consumer discretionary space,” said Gautam Duggad, Head of
Research for Institutional Equities at Motilal Oswal Financial Services.

Share price of Titan jumped 1,580 per cent to Rs 1,194 as of December 30, 2019 from Rs 71.10 in
December, 2009. Page Industries soared 2,610 per cent during the same period.

Mumbai-based investor Vijay Kedia has a piece of advice on stock selection for investors trying to spot
potential multibagger opportunities.

“Focus on the company management. Good managers in a bad business are better than bad managers
 in a good business. An investor should chase the story behind his investment, not the money on the
table. Money can make you rich, but the story can make you wealthy,” he said.

Kedia himself made over 100-bagger returns in stocks like Cera, Atul Auto and Aegis over the past 12
years.

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LATEST COMMENT
Flawed data. Bonus and stock split is not taken into consideration. Ex: Natco. Moving forward please
have specialists or editors with some knowledge go through such articles.

- Bhaskar Vittal
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