Top 5 Small Cap Multibagger Stocks are as follows
1. HLE Glascoat Ltd
HLE Glasscoat company is the combination of two companies HLE Engineers and Swiss Glasscoat, Actually they have their own individual businesses like HLE is Fltering and Drying segment and Swiss Glasscoat is in glass line equippments manufacturing.
The company is engaged in manufacturing and sale of glass lined equipments and filtering and drying of raw material those were used in manufacturing medicines. The company offers glass lined equipments, dryers, blenders, agitated filters, pipes, valves and fittings and other pharma related things for use in Pharmaceuticals, Chemical and fertiliser industries.
As company expanding their capacities we can take it as positive. They have 60% market share in filtration and Drying. If you look at their revenue mix they are earning 47% of revenues from filtration and drying, 35% revenues from Glass lined equipments and 17% of revenues from chemical segment as they are earning major portion of their revenues from Domestic Market.
The important support levels to add this stock are 3020, 2518 and 2150.
Clients of HLE Glasscoat :
India’s top and almost all the big players of pharma sector are the clients of this company. This company will grow till the pharma sector and chemical segments sustains. The clients are Divi’s Laboratories, Sun pharma, Cipla, Dr. Reddy’s, Vsh, Zydus, UPL, Atul, Syngenta etc.
2. Sequent Scientific Ltd
Sequent scientific is a India’s No.q Animal Health Company and will be among top 20 in the worlds. This company has strong presence across the world in 100+ Countries with strong distribution network. Basically this company manufactures medicines and formulations for the live stock animals like Sheeps, horses, cows etc and Companion animals such as Pets like Dogs, Cats etc.
The key positives are No competition, Strong Distribution network and distribution network acting as entry barrier, so it’s not easy to enter new players and gain market share. As per the recent data most of the people are showing the interest in adopting the pets and due to lockdown they are taking care of them more. This data is enough to analyse and estimating the growth of this stock. This company is trying to grow their market share in USA as USA is the big market for Pets as like as Europe. Important support levels to add this stock in correction are 220, 180 and 140.
3. Solaria Activ Pharma Sciences Ltd
Solaria activ pharma is an india’s second largest API (Activ Pharmaceutical Ingredient) manufacturer and this company formed by acquiring API business from Strides pharma and Sequent scientific. This company also doing business in CRAMS (Contract research and manufacturing services) business and generating 10% of the revenues.
If you look at their revenue mix they are generating 25 – 30% by selling Ibuprofen – Pain Killer, 10 – 11% by selling Praziquantel – Anti warm medication, 8 – 10% by selling Gabapentin – Seizures, 4 – 6% by selling Mycophenolate Moletil USP – An immunosuppressant medication to prevent Organ transplanatation rejections from Immune System, 4 – 6% by selling Tamiflu – to prevent Influenja A & B usually Flus. And strong regulatory approvals can help this company to sell their products across the countries. Majorly company focusing on CRAMS business as it is has high margins and the acquisitions which increases the profitability of the company. Major support levels to add this stock in corrections are 1500, 1320 and 1160.
4. Tasty Bite Eatables Ltd
This company owned by MARS International which manufactures Snickers Pedigree etc. this company majorly focuses on two business segments one is consumer service in which they manufacture ready to cook food in the brand name of Tasty Bite which is popular in western countries. And the second one I’d Food Service business in which they supply Sauces and frozen foods to Quick Service Restaurants like Dominos, Pizza Hut, Burgerking etc. They focused on western countries as they are earning 45% of revenues from western countries and even the parent company is also from western countries.
The positives are western culture and the changing food habits in the people. Due to their busy schedule they prefer either to cook quickly or to eat quickly in QSRs. In both segments they are catering well and they have strong distribution network across the world especially they are strong in western countries. One more thing they mainly focused on Vegetarian and organic ready to cook food that to without any preservatives so healthy food in less time. One more positive is the QSRs can’t change their suppliers quickly like month on month. The major support level is 15000, 13180.
5. Blue Star Ltd
Every knows this company as AC manufacturer. Apart from ACs they are also manufacturing Air Purifiers and water purifiers, Air Coolers and etc. and they are also into Commercial AC provider business. Company majorly focusing on converting their business from AC manufacturer to Consumer durable goods company and company wants to manufacture budget ACs so that we can understand that company targeted budget market. They already have 12% market share in India which they targeted to grow to 15%. The important support levels to add this stock in corrections are 740, 570, and 460.
Disclaimer : Above stocks are suggested purely based on my personal view. So please do some research and get some conviction about the stock, so that you could able to hold the stock in corrections and you can add more in the corrections. Else please take suggestion from your financial advisor.
Conclusion :
Above discussed top 5 small cap multibagger stocks are capable enough to deliver multifold returns in coming years as they are fundamentally and financially strong as well their business has strong moat.