Everyone can make money by investing the money by investing into the stocks at fair valuation. But catching stocks at fair valuation is a bit difficult at the current situation as already market was grown rapidly in the past couple of years after covid. Now will discuss a few undervalued multibagger stocks which can deliver multi fold returns in coming years. These all stocks are currently ignored by the market but they have the enough potential to move upside and these stocks should be hold for long term. Then only we can see multibagger returns in these stocks.
Undervalued Multibagger Stocks are as follows..
1. HDFC AMC Ltd.
HDFC AMC is one of the India’s largest fund house. HDFC AMC is currently generating positive cash flows and trading at fair valuation i.e 30 pe. This company also backed by india’s most profitable bank HDFC Bank. If you look at the return ratios of the company, the last 3 years ROE is 30.4% and the ROCE is 40% and more over HDFC AMC is a debt free company.
As everyone expected the new age mutual fund companies not destroyed much enough the traditional fund houses, so it would be big positive for the mutual fund companies. HDFC AMC is generating positive cash flows, generating healthy return ratios and more over a debt free company which trading at the fair valuation, so now we can consider it as one of undervalued multibager stocks.
2. Aditya Birla Sun Life AMC Ltd.
Aditya Birla Sun life AMC is one of the India’s largest fund house and biggest AMC in non bank AMCs. As we discussed in the HDFC AMC, the same advantage will be there for Aditya Birla AMC. This company is also trading at very fair valuation as the mutual fund theme stocks were ignored by the market. So this company is also taken place in undervalued multibagger stocks. Aditya Birla AMC is also a cash rich company, that generating positive cash flows and almost a debt free company. If you look at the return ratios of the company, the last three years ROE is 35.8%, ROCE is 46.2% and NPM is at 47.9%. how healthy ratios they are, thought this AMC company is trading at 20 PE multiples. Overall the company is looking good at valuation as well in financials. Aditya Birla AMC is currently trading at 428.
3. Persistent Systems Ltd.
Persistent Systems Ltd provides Software and sstrategic solutions to it’s clients to help them to evolve digitally as entire world is moving towards digitalization. This company also has it’s very effective solutins to cater BFSI segment such as loans, claims management, cloud banking and etc. also has strategic partnerships with Salesforce and aws. As entire IT pack corrected in recent days, though all are still trading at higher valuations. But persistent is looking good at this price and valuation and one more important point to be noted is Persistent has less exposure to the Europe which is good. This company is maintaining good financials and this stock is currently trading at 3748.
4. L & T Technology Services Ltd.
L & T Technology Services Ltd is India’s one of leading Engineering, Research and Development (ER&D) company, also provides digitalization solutions to the companies that are in various industries. Comparatively LTTS is trading at reasonable valuation among other ER&D companies such as TATA Elxsi and KPIT. Still KPIT needs to be correct more to get fair valuation as this stock still trading at little expensive price. LTTS trading 36.8 price to earnings multiples, where industry PE is at 32. LTTS has great potential to grow and maintaining healthy ratios and almost a debt free company which is currently trading at 3717.
5. ICICI Lombard General Insurance Co. Ltd
ICICI Lombard is very good company both at fundamentals and financials. This company has commandable market share in both health insurance and motor insurance. We’ve seen lot of selling pressure in this company as there are lot of covid claims to be settled. But now this worst situation is going to be ended and this company’s results alsso showing the same. This stock is trading at 35 price to earning multiples, where as industry PE is at 62. Where we have the scope to see multi fold returns in this company. This company is currently trading at 1132.
You can also check with Star Health Insurance, which is operating in the same industry, Health Insurance. This company is also trading at fair valuations.
6. Dr. Lal Path Labs Ltd.
Dr Lal Pathlabs Ltd is India’s leading diagnosis centre, it has strong presence and established across the country. The market almost ignored the diagnosis business as covid cases are not coming significantly. But the business model they are driving and importance of diagnosis will lead these companies further. If you look at the company’s return ratios from the last three years, ROE is 24.4% and the ROCE is 31.1% and the company is almost a debt free company. This stock is currently trading around 2300.
7. Metropolis Healthcare Ltd.
As we discussed about Dr Lal Pathlabs, the same would be applicable to Metropolis Healthcare also, as this company is also maintaining good return ratios as well generating positive cash from their operations, Metropolis is also a debt free company and this stock is currently trading at 1600.
8. Rainbow Children’s Medicare Ltd.
Rainbow Children’s Medicare Ltd operates their wide range of services such as Paediatric, Gynic and etc related to just born and children’s across the country. As all you people knows there is lot of scope for chilsren’s hospitals to grow and to deliver multi fold returns in coming years. Already we have seen some decent rally in this stock but I believe still there a big way to grow. Better to add in some corrections as this stock is currently trading around 810.
9. Fiem Industries Ltd.
Fiem Industries Ltd is an India’s leading manufacturer of lighting and signaling systems of two and four wheeler vehicles. This company’s clients are TVS, Honda, Yamaha, Ola. So that we can understand the presence of this company in the market. As this company tied up with Ola, we have seen a good run up in this company. But we believe still has enough potential to grow as coming years are going to be ruled by electric vehicles, this company will have a opportunities. This company is currently trading at 819.
Conclusion:
In the conclusion, I would like to clearly informing you that the all above mentioned stocks are not for the short term, purely for long term investors. As these stocks has the big way to grow in coming 10 to 20 years. If you hold these stocks till there we can see multi fold returns otherwise we will destroy our wealth instead of creating wealth. This is major mistake that retailers are doing in the stock market. By making a note of it, plan your positions accordingly by doing some minimum research befor investing into any of the above stocks. That’s all about undervalued MULTIBAGGER stocks in India that are trading at fair valuations.