The Hindu Business Line : Checking out the multi-baggers

If you were keen on buying the multi-baggers in this particular rally, you should have bought small-caps from the beaten down realty and infrastructure sectors on March 9.

Thirty-eight of the BSE-500 stocks were multi-baggers in this rally, delivering a threefold or higher gain to their investors. The Sensex rose 70 per cent in this period.

Realty/infra lead from front

The real estate and infrastructure sectors would have been the last to be picked by fund managers had they been asked to pick out-performers in March. While the former was grappling with dwindling demand and a severe liquidity crunch, the latter was feeling the effect of a capex slowdown. But both sectors have surprised, with more than half the list of multi-baggers coming from them.

Housing Development and Infrastructure Ltd. (HDIL) tops the multi-baggers list, with a five-fold price increase over this period. A recovery from a very low valuation and a unique business model made it stand out from its competitors.

B.L. Kashyap and Sons, Orbit Corp, IVR Prime Urban and Mahindra Life Space Developers were the top real estate gainers while Housing Development and Infrastructure, Reliance Industrial Infra- structure and Hindustan Construction led the infrastructure gainers. Fifteen of the 38 multi baggers came from these two sectors. Depite the trepidation about the rupee wreaking havoc on IT companies, a few stocks from the sector did make it to the multi-baggers list — NIIT, Everonn Systems and Tanla Solutions.

Small-cap bias

Predictably, a clear small-cap bias was observed among stocks delivering manifold gains.

Twenty-eight of the 38 stocks that delivered fantastic returns by tripling in price were small-caps (market capitalisation less than Rs 2,000 crore). Reliance Industrial Infrastructure, B.L. Kashyap & Sons and Orbit Corporation topped small-caps.

Of the remaining, nine were mid-cap stocks. HDIL is the top gainer both in the BSE-500 and BSE Mid-cap space. Reliance Capital was the lone large-cap that notched up threefold gains.

Though multi-baggers were rare in the Sensex pack, a few index stocks did see prices double.

Seven stocks of the Sensex 30 saw prices rise over 100 per cent since March 9. The top index gainers were ICICI Bank (up 156 per cent), Reliance Infrastructure (up 152 per cent) and DLF (up 147 per cent).

Low price

If you didn’t pick realty or infrastructure on March 9, you may have done equally well betting on stocks with a low absolute price. It bears mention that 28 of the 38 multi-baggers traded below Rs 100 on March 9.

Nineteen of them languished below Rs 50 before the rally. This clearly points to the investor fancy for low-priced stocks.