Top 5 10x Stocks to Add to Your Watchlist

The Indian stock market has witnessed a sharp rise in the past few years. Over the last decade, the BSE Sensex has risen threefold with a compound annual growth rate (CAGR) of 11.9%.

If you had invested in the BSE index fund, you would have at least tripled your money.

But this is just the broad index. Many stocks in the market have multiplied much more, growing 10x in the last 5-10 years.

They have taken advantage of favourable economic conditions, strong domestic consumption and robust export opportunities.

The government also has a big role to play in this. Earnest initiatives such as the Make in India and the PLI incentives have allowed companies to expand sales. Apart from this, the country is reorienting its trade policy to take advantage of the increasingly popular China-plus-one strategy.

While the BSE Sensex is up 3 times, there are stocks that have multiplied much more, growing 10x in the last 10 years.

These stocks are often labelled "multibaggers" because they can multiply the original investment several times over.

Investor on the prowl for massive returns usually look for these multibaggers. This is because a company's past performance can be a crucial indicator of its growth potential.

Keeping this in mind, let's look at the stocks that have multiplied by 10x in the past few years.

#1 Bharat Electronics

First on the list is Bharat Electronics.

Bharat Electronics is the dominant supplier of radar, communication, and electronic warfare equipment to the Indian armed forces.

It boasts a diversified product line that includes non-defence products, software, and electronic manufacturing services.

Along with catering to the domestic market, the company exports its products to several countries, including Botswana, Indonesia, Sri Lanka, Russia, the US, and South Africa.

The company's stock price, and by extension, the marketcap has multiplied over 10x in the past few years. The stock was trading at Rs 10 in the first few months of 2014, and now trades at more than Rs 100.

As Warren Buffet says...

'If the business does well, the stock eventually follows.'

This holds true for Bharat Electronics. The business has performed exceedingly well over the last decade.

Bharat Electronics Financial Snapshot (2018-2022)

	2017-2018	2018-2019	2019-2020	2020-2021	2021-2022
Revenue Growth (%)	18.39%	14.06%	7.43%	7.25%	9.53%
Operating Profit Margin (%)	21.32%	24.51%	22.04%	23.66%	23.25%
Net Profit Margin (%)	13.42%	15.19%	13.82%	14.66%	15.31%
Return on Equity(%)	17.87%	21.45%	18.59%	19.59%	20.17%

Source: Equitymaster

While the company's revenue has grown at a 10-year compounded annual growth rate (CAGR) of 9.1%, the net profit has grown at a CAGR of 10.8%. The 10-year average return on equity (RoE) is robust at 17.5%.

Bharat Electronics is one of the biggest beneficiaries of the government's decision to put defence items under an import embargo. Recently, the company revealed that its order book stands at Rs 600 bn, 4x its FY22 revenues.

The stock's skyrocketing performance is not solely based on the defence segment. It also comes from the Rs 80.6 bn deal with the electric vehicle (EV) maker Triton Electric Vehicle. The company plans to manufacture battery packs.

To know more about the company, check out its financial factsheet and latest financial results.

#2 Bajaj Finance

Next on our list is Bajaj Finance.

Bajaj Finance is the largest NBFC (non-banking financial company) in India. The lender boasts an AUM (assets under management) of over Rs 2 tn. Its portfolio is geared towards retail and consumer/mortgage finance, accounting for over 80% of the AUM.

Bajaj Finance competes with banks and NBFCs for traditional retail (mainly personal /consumer loans and mortgages) and certain non-retail lending products.

In personal financial services, the company focuses on a relatively lower income group as compared to retail banks that focus on the high net worth individuals.

The business has been growing well.

The private lender's advances have grown over 2.4x in the last five years. The net non-performing assets (NPAs) have remained steady, in the range of 0.3-0.4% from the financial year 2018, the lowest in the industry.

This is admirable as it indicates the company has kept risks at bay while expanding the business.

Bajaj Finance Financial Snapshot (2018-2022)

	2017-2018	2018-2019	2019-2020	2020-2021	2021-2022
Net Profit Growth (%)	35.90%	60.00%	31.80%	-16.00%	59.00%
Operating Profit Margin (%)	67.60%	70.60%	65.30%	59.30%	62.30%
Net Profit Margin (%)	19.50%	21.60%	20.00%	16.60%	22.20%
Return on Equity(%)	19.70%	22.60%	20.40%	12.90%	17.60%

Source: Ace Equity

The company has also increased its profitability. The 5-year CAGR net profit stood at 20.1%. The 5-year average RoE stood at 18.6%. The expansion in the marketcap, up 10x in the past 6 years reflects the stellar performance.

Bajaj Finance's forte has been the use of data analytics . The company uses artificial intelligence in its financing scheme. This has allowed the business to expand while retaining its credit quality.

The business is intact and well-poised to grow over the long term. Bajaj Finance's long-term target is to continue growing its AUM at 25% while maintaining sturdy return ratios.

The growth will come from existing verticals in tandem with new ones, such as microfinance, commercial vehicle loans and tractor loans.

To know more about the company, check out its financial factsheet and latest financial results.

#3 JSW Steel

Third on our list is the steel major of the country, JSW Steel.

JSW Steel is one of the country's largest producers and exporters of steel, with a total production of 28.5 MTPA (million tonnes per annum).

The company has been actively augmenting its capacity, nearly doubling it in the last six years. The government's push towards investing in infrastructure has helped the company boost sales.

JSW aims to increase its capacity to 37 MTPA by 2025. It has announced a capex of Rs 487 bn for the next three years, of which Rs 200 bn is for the financial year 2023.

Apart from expanding capacity, the company has been concentrating on increasing its share of value-added products.

JSW Steel Financial Snapshot (2018-2022)

	2017-2018	2018-2019	2019-2020	2020-2021	2021-2022
Revenue Growth (%)	29.31%	17.84%	-13.05%	9.02%	83.65%
Operating Profit Margin (%)	20.44%	22.60%	16.94%	25.97%	27.70%
Net Profit Margin (%)	8.35%	8.91%	5.34%	9.86%	14.30%
Return on Equity(%)	24.22%	24.16%	11.03%	19.24%	37.25%

Source: Equitymaster

The business has done well in the last ten years. While the revenue has doubled every 5 years, growing at a 10-year CAGR of 15.9%, driven by capacity addition and rising steel prices, the net profit has registered a growth of 30.2%.

Its ten-year average RoE stands at 19%. This stellar performance has helped the stock price touch its all-time high of around Rs766, up 10 times since 2013.

While the company does have debt on its books, the debt-to-equity ratio for the financial year 2022 stood at 0.9x.

To know more about JSW Steel, check out its factsheet and latest quarterly results.

#4 SRF

Fourth on our list is SRF.

SRF is a chemicals conglomerate that manufactures industrial and speciality intermediates.

The business portfolio spans fluorochemicals, speciality chemicals, packaging films, technical textiles, and coated and laminated fabrics.

The company is a market leader in most of its business segments. Due to its extensive experience in fluorine, it is the sole producer of some key refrigerants in India.

These features work well for the business, which has grown exponentially in the last ten years.

SRF Financial Snapshot (2018-2022)

	2017-2018	2018-2019	2019-2020	2020-2021	2021-2022
Revenue Growth (%)	16.53%	24.95%	1.84%	16.64%	48.22%
Operating Profit Margin (%)	17.64%	19.01%	20.57%	25.75%	25.66%
Net Profit Margin (%)	7.97%	8.49%	12.53%	14.03%	15.06%
Return on Equity(%)	13.69%	15.38%	20.22%	20.34%	24.51%

Source: Equitymaster

The sales and net profits have grown at a 10-year CAGR of 12% and 17.4%, respectively. The 10-year average RoE stands at 16.5%.

This stellar growth has spurred the stock price, which has compounded consistently, growing 10x in the last six years.

The growth in the business comes from robust domestic demand, rising import substitution opportunities, and strong growth in exports.

And now, the government's proactive support under the 'Make in India' initiative also augurs well for the chemical business.

SRF has been expanding its capacity continuously, spending over Rs 15 bn per annum on capex to meet the growing demand.

It plans to spend over 30 bn in the financial year 2023. Recently, the company approved a capex of Rs 6 bn for four new plants in the agrochemical space and capacity enhancement of an existing plant at Dahej, India.

These projects are a part of the company's overall expansion strategy in the speciality chemicals segment and will likely be completed in the next 10-12 months.

To know more about the company, check out its financial factsheet and latest financial results.

#5 Bajaj Finserv

Last on our list is Bajaj Finserv.

Bajaj Finserv is the holding company for businesses dealing with the financial services of the Bajaj group. It offers financial services, such as finance, insurance, and wealth management, through its investments in subsidiaries and joint ventures.

The insurance business of Bajaj Finserv functions under a joint venture with Allianz SE, one of the world's leading composite insurers.

The business has done extremely well in the past few years, mirroring the stock price movement. The company recorded its highest-ever assets under management and annual consolidated profit after tax in fiscal 2022.

And this comes with a significantly high capital adequacy ratio of 25%, well above the regulatory requirement of 15%.

Bajaj Finserv Financial Snapshot (2018-2022)

	2017-2018	2018-2019	2019-2020	2020-2021	2021-2022
Revenue Growth (%)	34.09%	29.65%	28.71%	10.49%	12.95%
Operating Profit Margin (%)	32.83%	35.29%	33.30%	32.41%	31.38%
Net Profit Margin (%)	12.71%	12.61%	10.93%	12.16%	12.15%
Return on Equity(%)	22.84%	24.37%	21.84%	22.07%	22.03%

Source: Equitymaster

The sales and net profits have multiplied, growing at a 10-year CAGR of 32% and 16%, respectively, explaining the stock's parabolic move. Bajaj Finserv's stock jumped from an average of Rs 130 at the beginning of 2015 to Rs 1,337 in 2023.

The RoE has remained buoyant at a 10-year average of 24%, and the company is debt-free.

The company's growth momentum should continue in this era of digitalisation, which will facilitate robust customer acquisition and enable the introduction of new products.

Moreover, a strategic reallocation of focus towards premium products can also boost business and profitability.

To know more about the company, check out its financial factsheet and latest financial results.

In conclusion

Investing in high-growth stocks involves a significant level of risk.

Also note that while a company's past performance is an important indicator of its growth potential, it is not a guarantee of future success.

Market conditions, industry trends, and other factors can impact a company's performance in ways that are difficult to predict.

Therefore, it is important to carefully evaluate the fundamentals of each company before making any investment decisions.

Happy Investing!

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...