HAL And Zomato To Jupiter Wagons: The Multibaggers Of 2023

Forty-eight stocks from India's broader Nifty 500 index returned multifold gains in 2023, as India's equity benchmarks scaled record highs.

As many as 12 stocks from the Midcap 150 index and 32 from the Smallcap 250 returned twofold or more gains. Capital goods, financial services and railways had the highest number of these so-called multibagger stocks.

In the large-cap segment, two stocks that outperformed are Zomato Ltd. and Hindustan Aeronautics Ltd.

Zomato made a comeback after a poor 2022, when its shares dived 59% as new-age tech startup stocks surged.

Zomato was up 2.2 times in 2023 on the back of improved financials and it turned profitable for the first time in April-June and turned in profit in July-September as well. Zomato Gold made a comeback and started charging platform fees as well.

Shares of aerospace and defence manufacturer HAL gained as much as 2.4 times. Strong order book and better execution worked for the company. The Defence Acquisition Council has approved a proposal to source equipment from HAL to enhance the operational capabilities of the Indian Air Force.

The power pack outperformed among the mid-cap stocks this year. Power Finance Corp. and REC Ltd. surged the most in the category, at 3.5 times. Both companies have seen robust loan growth driving their shares.

Among the small-cap stocks, BSE Ltd. has been the top outperformer, surging 4 times in 2023. Its FY24 earnings per share estimate was Rs 35.72, while the price-to-earnings ratio stood at 63 times.

Suzlon Energy Ltd., which was recently added to the MSCI index, was the second best performer as it rose 3.6-fold. The government's push for renewable energy has helped the company bag a healthy order book.

Apar Industries Ltd. also outperformed in the small-cap segment on the back of strong financials, with profit nearly doubling. The scrip rose 3.2 times.

Almost all railway stocks have been multibaggers for this year as the Indian Railways handed out more orders to revamp old trains, develop new trains and lay down more tracks.

The Minister of Railways said in an interview recently that the government is set to spend Rs 1 lakh crore on buying new trains.

Jai Balaji Industries Ltd. grew 13 times this year on the back of improved financials, a fivefold year-on-year growth in operating profit, while its EPS improved 13 times to Rs 12.56 in Q2 from Rs 1.66.

Kaynes Technology India Ltd. gained over 3.5 times. It received approval under the government's Performance-Linked Incentive scheme on Nov. 18 and forayed into the semiconductor business. The company also recorded strong customer additions in high-value and high-margin verticals.

Jindal Saw Ltd. gained as much as fourfold in 2023, after the company's Ebitda margin doubled.