Top 5 Multibagger Growth Stocks to Watch Out for in 2025

Filled with volatility, 2024 has been a rollercoaster ride to say the least.

Small-caps and midcaps shone and gave extraordinary returns in the first half, but the last few months proved as a reminder of how important corporate earnings are... stocks that were riding on narratives and the ones that missed estimates were taken to the cleaners.

Nevertheless, many stocks still ended with big gains of over 100% and select growth stocks topped the list.

These multibagger growth stocks may still have some juice left and can be candidates for further growth in 2025.

Let's take a look at 5 such stocks.

By the way, we've filtered these stocks using a detailed set of criteria to identify fundamentally strong and high-growth opportunities.

These filters include:

Stock price return over the past year exceeding 100%.

The compound annual growth rate (CAGR) of sales and profits over the past three years being greater than 15%.

Return on equity (ROE) and Return on capital employed (ROCE) more than 15%.

Price-to-earnings (P/E) ratio below 40, ensuring the stocks are reasonably valued relative to their earnings.

Debt-to-equity ratio less than 1.

Promoter holding above 50%, signalling high promoter confidence and alignment with shareholder interests.

Market capitalisation above Rs 1,000 crore, avoiding small illiquid nanocaps.

This screening process helped identify stocks with strong fundamentals, impressive growth trajectories, and reasonable valuations, making them excellent candidates for further analysis.

#1 Mazagon Dock

Mazagon Dock Shipbuilders has a strong financial track record with consistent revenue and profitability.

Its revenue has grown at a compound annual growth rate (CAGR) of 32.7% in the last 3 years. Similarly, the profit after tax (PAT) has grown at an astonishing rate of 55.6% in the last 3 years.

The company is effectively debt free.

Even after correcting from the top, Mazagon Dock has delivered 117.3% returns in the past 1 year.

Mazagon Dock is a defence public sector undertaking (PSU) under the administrative control of the Ministry of Defence.

It is one of India's leading shipyards, specializing in the design, construction, repair, and refit of warships and submarines for the Indian Navy.

The company also builds and repairs various types of vessels and related engineering products for commercial clients.

It builds warships (destroyers, frigates, corvettes, patrol vessels), submarines (conventional), merchant ships (tankers, bulk carriers, container ships), and provides ship repair services.

But can this stock continue its rally in 2025? Let's look at its growth prospects...

As a defence PSU, it enjoys robust support from the Indian government, ensuring a steady flow of warship and submarine orders. The "Make in India" initiative and Defence Production Policy 2018 have enhanced the domestic defence industry, fostering company's growth.

The Indian Navy's modernization program involves acquiring new vessels, creating significant opportunities for the company to secure valuable contracts and strengthen its order book.

The company aims to expand its exports of defence platforms internationally, participating in global exhibitions to attract foreign clients with its technical capabilities.

To lessen reliance on warship and submarine construction, the company is exploring diversification into the Maintenance, Repair, and Overhaul (MRO) sector and manufacturing heavy engineering equipment platform.

But all is not rosy. There are a few key challenges that the company faces...

It faces challenges with prolonged timelines in warship and submarine construction, often leading to delays and cost overruns.

It relies on foreign firms for critical equipment, risking procurement delays, exchange rate fluctuations, and geopolitical issues.

It competes with established shipyards in China, South Korea, and Japan, which benefit from lower labour costs and government subsidies.

Nevertheless, it has some key triggers that could help continue the momentum in 2025.

The company received an order in August this year from ONGC for the Wellhead Platform and Pipeline Project (DSF-II) on EPC basis at Rs 46.8 bn.

Additionally, in September 2024, the company secured a work contract from ONGC for Pipeline Replacement Project 8 Group A at Rs 14.9 bn.

The company has a planned capex of Rs 40-50 bn over the next 3-4 years.

The total order book as on 30th September 2024 stands at Rs 398.7 bn.

The healthy order book and planned capex auger well for its future earnings.

To know more about the company, you can have a look at Mazagon Dock's fact sheet and quarterly results on our website.

#2 Oil India

Coming second on the list, Oil India Limited gave 150% returns in the last 1 year driven by a 3 year CAGR of 21.7% in sales and a CAGR of 21.6% in its net profit. The stock is currently trading at a price to earnings (PE) multiple of 10x.

Oil India is a fully integrated energy company with a strong presence in upstream operations (the exploration and production stages of the energy value chain) and expanding interests in downstream activities (refining, distribution, and marketing stages of the value chain).

Oil India owns a 69.63% stake in Numaligarh Refinery Limited (NRL), responsible for refining crude oil and producing petroleum products, enhancing its integrated status.

Here are some of the key triggers for its future growth.

Management has set a production target of 4 million tonnes (mmt) of oil and over 5 billion cubic meters (bcm) of natural gas in the next two years.

The near-term growth trajectory for oil and gas production is expected to continue at a rate of 4-5%.

NRL's expansion is expected to increase its refining capacity to 6 mmtpa and is expected to be commissioned by December 2025. This expansion will significantly boost Oil India's downstream operations and revenue streams.

Duliajan-Numaligarh Pipeline (DNPL) expansion, consisting of two phases to be completed by March 2025 and March 2026, are expected to further support the increased gas demand from the expanded NRL refinery.

Oil India has ambitious capex plans for FY25, targeting Rs 60-70 bn for standalone operations and Rs 100-120 bn including NRL.

The company is poised for growth due to its strong position in India's upstream sector, diversification into downstream operations and renewables, and commitment to sustainable practices.

However, it must navigate geopolitical uncertainties, environmental regulations, and rising competition to sustain its leadership and profitability in the changing energy landscape.

For more, check out Oil India's detailed financial factsheet.

#3 Godfrey Phillips

Third on the list is Godfrey Phillips. Despite belonging to a sin sector and being heavily regulated, the company has showed great financial performance, which is reflected in its stock price performance.

The stock has delivered returns of 188% in the past year. The table below shows a snapshot of Godfrey Phillips 's income statement and its stupendous PAT growth.

Godfrey Phillips Income Statement

Year Ending	Mar-20	Mar-21	Mar-22	Mar-23	Mar-24
Net Sales	26,851	20,893	21,465	28,652	35,345	Rs m
Sales Growth	13%	-22%	3%	33%	23%	%
Expenses	22,850	19,840	20,542	27,589	35,274	Rs m
Operating Profit	6,985	6,600	7,474	9,716	11,064	Rs m
Operating Margin	26%	32%	35%	34%	31%	%
Other Income	1,069	1,186	1,141	1,681	2,143	Rs m
Depreciation	1,552	1,413	1,452	1,536	1,460	Rs m
Interest	302	308	339	290	261	Rs m
Profit before tax	5,135	4,873	5,682	8,726	10,950	Rs m
Tax	1,287	1,108	1,302	1,822	2,110	Rs m
Net profit	3,848	3,765	4,380	6,904	8,840	Rs m
Net profit Growth	N/A	-2%	16%	58%	28%	%
Diluted EPS (TTM)	74	72.4	84.2	132.8	170	Rs

Data Source: Equitymaster

While tobacco remains the core business, Godfrey Phillips is actively pursuing growth in other areas, notably confectionery and exports.

The confectionery business achieved a 30% growth in gross sales during FY24, driven by the success of its flagship brand, Naturalz Imli, and the growing popularity of Funda Gumshums chewing gum.

Godfrey Phillips understands the importance of adapting to changing consumer preferences and regulatory landscapes.

Therefore, it is equipping the cigarette R&D team to meet future regulatory requirements and is developing a range of alternative and new-generation products.

For more, check out Godfrey's financial factsheet.

#4 Authum Investment

Authum Investment & Infrastructure (AUTH) share price has had a dream run, with its stock price running up by 124% in the past year.

And it's not just the stock that has run up... its sales for FY24 stood at an astonishing Rs 25,867 million (m) compared to a meagre Rs 206 m in FY20.

This stark improvement has been due to its renewed business focus.

Authum operates a two-pronged business, equity investment and credit. It leverages its deep understanding of India's capital markets in identifying and investing in large, credible, high-growth businesses, particularly in sectors poised for sustainable growth.

It has made a few big acquisitions in the recent past the latest being the open offer for Prataap Snacks.

The company is relatively new in credit business. It is focusing on restructuring credit, capitalizing on the government's push for healthier NBFC balance sheets, and the growing securitization market.

The company acquires complete credit portfolios at discounted prices, seeking to recover outstanding amounts and generate profits.

As part of its future plans, Authum is aiming for a balanced approach to investments, transitioning from a 100% equity focus to an anticipated 60:40 split between equity and credit investments.

It wants to create self-sustaining platforms to establish a comprehensive financial services company, targeting a Return on Equity (ROE) of 16-20% across all platforms.

The ability to transfer gains from the equity business to fuel the growth of the credit business provides a unique and sustainable growth mechanism to the company.

Finally, we would like to mention that Mr. Sanjay Dangi acts as Non-Executive Non-Independent Director of Authum Investment.

He has a history of bans imposed by the Securities and Exchange Board of India (SEBI). This history raises concerns about his past conduct and potential implications for Authum's reputation and regulatory compliance.

For a detailed analysis, check out Authum's financial factsheet.

#5 Ganesh Housing

Fifth on the list is Ganesh Housing. The stock price has given more than 200% returns in the past year.

Its 3-year sales CAGR comes to 74% while profit CAGR comes to 85%.

Ganesh Housing specializes in developing and selling premium residential and commercial properties in Ahmedabad.

With a large land bank of around 500 acres, mainly in the western and northwestern areas, the company meets the growing demand for high-quality real estate.

By focusing on the mid to high-end segments, Ganesh Housing can command premium pricing and achieve higher margins compared to mass-market projects.

Ganesh Housing has a clear roadmap for growth over the next 5 to 7 years, driven by several key initiatives.

Ahead of schedule, with Phase 1 set for completion in Q1FY26, the company's Million Minds SEZ has received strong interest from potential tenants.

Malabar Retreat: A premium residential project with presale revenue of Rs 100 crores. The booking for this project are expected to rise in the latter half of FY25 as construction progresses.

One Thaltej Commercial Venture: This project is in final approval stages, with construction starting in 3 to 5 months. It has a saleable area of 1.8 m square feet, projected to generate Rs 21 bn in revenue.

The company aims to maintain a growth rate of 20% to 25% CAGR over the next decade, driven by its ongoing and planned projects, its strategic land bank, and the anticipated growth of the Ahmedabad real estate market.

To know more, check out Ganesh Housing's financial factsheet.

Conclusion

Investing in growth stocks has consistently proven to be a rewarding strategy, particularly in an expanding economy like India.

With its strong demographic dividend, rising middle class, and rapid urbanization, the country provides fertile ground for high-growth companies to thrive.

While past performance is no guarantee of future results, the trajectory of high-growth companies in India often continues as they expand into untapped markets and innovate to meet growing consumer demand.

It is also essential to conduct thorough research into the company's financial health and its corporate governance practices before making an investment decision.

For investors with a long-term vision, identifying and investing in such companies can be a pathway to substantial wealth creation.

If you want to dig deeper, use Equitymaster's stock screener to check the top growth stocks in India.

Happy Investing.

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