3 Multibagger high growth stocks to buy now for an upside of up to 36%; Do you own any?

Investing in growth stocks has recently gained traction in the Indian markets. Growth stocks are those stocks that are expected to grow at a rate significantly above the average growth rate for the market. They expand faster than their counterparts in terms of sales and profits. 

Generally, these stocks do not pay dividends as they reinvest their earnings to accelerate growth. Investing in growth stocks is a great way to earn money through capital appreciation. 

Here are three growth stocks that one can consider buying for long-term gains: 

Varun Beverages 

The company manufactures, sells and distributes soft drinks under trademark brands owned by PepsiCo. It has been working on a franchisee model with a licence for 17 states and two union territories in India. 

The company’s business has flourished over the past five years. Its revenue grew from ₹ 5,105.26 crores in 2018 to ₹ 13,173.14 crores in 2022. The company’s profit after tax increased from ₹ 299.86 crores in 2018 to ₹ 1,550.11 crores in 2022. 

In fact, its shares have given multibagger returns of 115.00% in the past year, as its share price increased from ₹ 640.53 to ₹ 1377.15. Therefore, if an investor would have invested ₹ 1 lakh in the company’s shares a year ago, the value of their holdings would have been ₹ 2.15 lakhs today! 

Motilal Oswal Financial Services has a buy call on the shares of Varun Beverages with a target price of ₹ 1620, which translates to an upside of 17.63% as compared to its share price of ₹ 1377.15. 

Varun Beverages is a large-cap company with a market capitalization of ₹ 88,002 crores. It has a high return on equity of 32.62% and an ideal debt to equity ratio of 0.76. 

Affle India 

Affle is a leading mobile banking and advertising technology company that offers a spectrum of digital solutions to businesses. A majority of its revenue comes from international business. In the digital advertising segment, Affle competes with InMobi and other giants in the field such as Google ads and Facebook ads. 

The company’s revenue and profit has multiplied significantly in the past 5 years. It does not distribute dividends to its shareholders and this money is used to acquire tech companies and invest in subsidiaries. Moreover, its customer base has expanded to include big brands like McDonald’s, Apollo, Swiggy, Zee5 and so on. In addition, the company has expanded into AI and Machine learning solutions. 

The company’s share price has decreased by 22.51% in the past year. However, it has increased by 473.51% in the past five years as its share price increased from ₹ 168.61 to ₹ 967.00. Therefore, if an investor would have invested ₹ 1 lakh in the company’s shares five years ago, the value of their holdings would have been ₹ 5.73 lakhs today.

Axis Direct in its report dated 07 February 2023 had given a buy call on the shares of Affle India with a target price of ₹ 1350.00 apiece. This translates to an upside of 39.61% as compared to its current share price of ₹ 967.00. 

Affle India is a small-cap company with a market capitalization of ₹ 12,666 crores. It has a high return on equity of 27.83% and an ideal debt to equity ratio of 0.10. The company’s revenue increased from ₹ 294.4 crores in 2019 to ₹ 1081.66 crores in 2022. Its profit increased from ₹ 48.82 crores to ₹ 214.69 crores during the same period. 

Dixon Technologies 

Dixon Technologies is a multinational company engaged in the manufacturing of consumer electronics like televisions, washing machines, smartphones, LED bulbs, CCTV security systems and so on. It does not have a brand of its own but it has long-term contracts with well-recognised brands like; Samsung, Xiaomi, Panasonic, OnePlus, and Philips. 

In the past five years, its revenue has increased from ₹ 2841.63 crores in 2018 to ₹ 10,697.08 crores in 2022. Meanwhile, its profit increased from ₹ 60.9 crores in 2018 to ₹ 190.39 crores during the same period. 

The company is expanding aggressively in a highly capital intensive industry, however, it has refrained itself from mounting debt on its books. In the past year, its business has suffered due to a lacklustre performance in consumer electronics and a slow progress in the mobile market, however, it is well poised to expand in the long term. 

The company’s share price has decreased by 35.19% in the past year, however, it has given multibagger returns of 299.11% in the past five years as its share price increased from ₹ 709.07 to ₹ 2830.00 apiece. Therefore, if an investor would have invested ₹ 1 lakh in the company’s shares five years ago, the value of their holdings would have been ₹ 3.99 lakhs today. 

Dixon Technologies is a mid cap company with a market capitalization of ₹ 16,824 crores. It has an ideal return on equity of ₹ 21.93% and an ideal debt to equity ratio of 0.55. 

Sharekhan has a hold call on the shares of Dixon Technologies with a target price of ₹ 3,770. This translates to an upside of 33.21% as compared to its share price of ₹ 2,830.00 apiece. 

Written by Simran Bafna 

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