From 207 to 17! You might need an archaeologist to find multibagger stocks in FY25

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Investors often chase multibaggers for their potential to multiply wealth rapidly. However, in FY25, finding one was as difficult as unearthing a rare metal. In FY24, 207 stocks (with a market cap over Rs 5,000 crore) delivered multibagger returns. In FY25, that number came down significantly just 17 out of 700-plus stocks. This is a staggering drop, especially for the Indian market, which was known for consistently churning out multibaggers over the years.

PG Electroplast, Shakti Pumps, V2 Retail, Shaily Engineering Plastics, JSW Holdings, Sarda Energy and Minerals and Pearl Global Industries are few stocks that beat the market trend and made investors happy. PG Electroplast clocked the highest return of 403% during FY25.

This steep drop of multibagger equities indicates a slowdown in the market's overall sentiment, particularly in the mid- to smallcap group, which often produces hefty returns.

Is this the worst time to find multibaggers?

The current market correction could mean that investors might have to lower their expectations when it comes to disproportionate returns. Additionally, when the market matures following a bull run, it normally rewards very specific companies or sectors.

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Even though interest rates and inflation are declining, there are concerns about tariffs and wars in the global economy, making investors jittery. So, it’s only prudent to have reasonable expectations in the short term, keeping a positive outlook for the long term.

"Investors should moderate their return expectations, as the market is shifting towards a stock-specific phase rather than broad-based rallies," said Abhishek Jain, Head of Research, Arihant Capital.

Analysts say, instead, investors should focus on doing in-depth research, comprehending business fundamentals, and diversifying their portfolio to reduce risk.

"Prior to making investments, it is often said that one should familiarize themselves with the basics of the stock market, various investment tactics, and methods for managing risk. Then comes the comprehensive research," said Rajesh Sinha - Sr Research Analyst at Bonanza Group.

However, this doesn't mean multibaggers are extinct, but they are decidedly more rare and will likely require greater patience and selectivity.

"Investors entering the market with expectations of quickly discovering the next 5x or 10x stock may be setting themselves up for disappointment. The current market environment appears more conducive to steady, moderate returns rather than explosive growth across numerous stocks," said Atul Parakh, CEO of Bigul.

What should be your return expectations in the current market?

For investors entering the market in expectations in the pursuit of exceptional returns remains, the approach must be grounded in pragmatic analysis rather than speculative enthusiasm.

Jain says over the long term, a 15% CAGR is a healthy and realistic return expectation from equities. However, select mid-tier stocks could still deliver 20-30% returns if picked carefully.

"Investors should prioritize companies with strong financial health, consistently growing revenues, expanding profit margins, and manageable debt levels and avoid the trap of pursuing stocks solely based on price momentum or market rumors," said Parakh.

Data: Ritesh Presswala

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)

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