These 10 multibaggers are off to a flying start in 2020 after tepid 2019

Caplin Point Laboratories’ 10-year return is mindboggling at 22,300 per cent. This stock has gained 23 per cent after falling 21 per cent in 2019.

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Other multibaggers VIP Industries, Aegis Logistics and Bombay Burmah Trading Corporation have gained 14-17 per cent in 2020 after a poor 2019.
NEW DELHI: After facing a rough patch in 2019, 10 multibagger stocks are off to a flying start in 2020. These stocks have jumped 14-43 per cent so far in 2020 after clocking negative returns for the previous year. For long-term investors, these stocks have delivered anywhere between 1,000 per cent and 22,300 per cent returns in last 10 years.

These multibaggers included Ajanta Pharma. The stock fell 18 per cent in 2019 only to jump 43 per cent in 2020, taking its 10-year gains to a whopping 6,341 per cent.

La Opala RG is up 32 per cent in 2020 so far after falling 33 per cent for the previous year. This stock jumped 4,500 per cent in last 10 years. Shares of Garware Technical Fibres, which were flat last year, are up 30 per cent this calendar. This stock gained 2,600 per cent in last one decade.


Caplin Point Laboratories’ 10-year return is mindboggling at 22,300 per cent. This stock has gained 23 per cent after falling 21 per cent in 2019.

Shares of Natco Pharma have gained 20.42 per cent year to date after falling 13 per cent in 2019, Supreme Industries and Solar Industries have gained 20 per cent each after falling 2 per cent each in the previous year. These stocks have gained 1,200-2,700 per cent in last 10 years.

Ajanta

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Other multibaggers VIP Industries, Aegis Logistics and Bombay Burmah Trading Corporation have gained 14-17 per cent in 2020 after a poor 2019. Analysts are positive on a few of these names.

Rough patch for most of these 10 stocks in fact lasted more than a year. In addition to 2019's fall, Ajanta Pharma was down 20 per cent in 2018 and 16 per cent in 2017. La Opala RG was down 28 per cent in 2018. Natco Pharma had fallen 29 per cent in 2018. Caplin was also down 39 per cent in 2018.

On Ajanta Pharma, Motilal Oswal Securities said: “After two years of earnings decline, Ajanta Pharma’s earnings growth is back on track, led by superior execution in India/Asia/Africa branded generics segment that accounts for 67 per cent of sales and healthy traction in new ANDA launches. Further, new orders from institutional agencies should also support sales as well as profitability.”

Axis Securities remains positive on VIP Industries, estimating VIP’s sales and profit growth of 12 per cent and 24 per cent over FY19-FY22.

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“Scaling up of Bangladesh operations, strong bargaining power with Chinese vendors for sourcing of luggage and efficient inventory management will lead to improvement in working capital efficiencies and also Ebitda margins expansion f 300 basis points to 15.6 per cent by FY22,” it said justifying premium valuations.

Strong performance, Kotak Securities said, compelled the brokerage to continue to recommend BUY rating on Aegis Logistics last week, with an increased target of Rs 285 from Rs 260), valuing the stock 24 times FY22 earnings.

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Analysts also like Natco Pharma.

“If you look at the entire pharma space what we have been bullish has been on companies which have got significant business in India. If there is a significant growth happening in the domestic pharmaceutical industry, a stock like Torrent pharma or Natco Pharma can definitely be looked at,” Sudip Bandyopadhyay, Inditrade Capital told ET NOW recently.

Coronavirus attack: 5 stocks to gain from easing China competition
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Coronavirus outbreak in China has hit supply chains across the world and India is no exception. Indian importers of raw materials too are facing problems as China factories remain shut for some time now. But the development has also brought some relief for domestic companies who competes with finished Chinese goods. Santosh Meena, Senior Analyst at TradingBells believes that electronic equipment, organic chemicals, fertilisers and plastics are top import sectors which may benefit from fall China imports.



Here are five likely beneficiaries of the reduced imports:

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PI Industries is leading players in the agrochemicals space which is getting major benefits from falling imports from China of fertilizer and chemical products. PI Industries is ready for multi-year growth in the CSM segment because of its enhanced R&D and supply scarcity related issues in China. Recently, it has witnessed big product wins and a significant surge in the deal pipeline. The company is in the mode of capacity expansion as management sees decent growth opportunities in the future.
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Plastic products are the major beneficiaries of falling crude oil prices. Recently Supreme Industries has witnessed decent margin expansion amid a slow down in volume. The future growth outlook is bright as management expects volume to pick-up, led by a revival in demand from packaging and plastic piping segment. Pipes and fittings are likely to witness strong demand from the government’s ‘Nal se Jal’ Scheme. The company witnessed strong demand from that scheme in Bihar and Uttar Pradesh.
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API and chemical business is shifting from China to India after pollution control measures are taken by the Chinese government. A recent fall in imports from China due to Coronavirus will lead to further growth in revenue and margin for Indian companies where IOLCP is a perfect play for both specialty chemical and API business. It has a profit growth of 34% CAGR for the last 5 years with a ROE of 36%. It has footprints in 56 countries and regularly supplying its high-quality products to major pharmaceutical players.
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Fertilizer is the fourth largest commodity that is imported from China to India and a recent fall in import due to Coronavirus is going to help domestic fertilizer players in a big way where UPL is the leader of this segment. The fallout from China disruption due to coronavirus on the CPC industry is uncertain and is still being weighed, according to UPL. Management sees this as an opportunity to seize market share and grab the space being vacated by Chinese chemical companies. Management believes that the opportunity for UPL to emerge as an alternative supply source offsets the potential negative impact on the overall demand for CPC as a result of the problems in China.
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