Filter to check potential multibaggers? Expert shares 10 metrics for finding hidden gems

Dalal Street’s blazing multibagger run has slowed dramatically in 2025. Although the Sensex and Nifty have recovered most of their earlier losses and investor portfolios have turned green again, the tide of explosive wealth creation seen in 2024 has ebbed. As per reports that in stark contrast to last year’s frenzy, only 10 stocks with a market capitalisation above Rs 1,000 crore have delivered multibagger gains in the first half of CY2025.

Yet, amid this cautious environment, ace investor and financial expert Abhijit Chokshi believes that identifying the next wave of wealth creators is far from impossible — provided investors know where to look.

“Investing shouldn’t be about chasing hype. It’s about disciplined filtering,” says Chokshi. “Even in uncertain times, fundamentally strong companies can deliver multi-fold returns if investors know what metrics to watch.”

Chokshi shares his 10-step checklist for filtering potential multibaggers — a roadmap for investors seeking to separate future stars from mere market noise:

Debt-to-Equity Ratio Lower debt indicates financial stability and less vulnerability during downturns.

Price-to-Earnings Ratio Undervalued stocks relative to earnings help avoid overpaying for future growth.

Return on Capital Employed (ROCE) > 15%
High ROCE demonstrates efficient use of capital in generating profits.

Return on Equity (ROE) > 15%
A sign that management is deploying shareholder funds effectively.

Return on Invested Capital (ROIC) > 15%
Reflects strong profitability after accounting for the full cost of capital.

Operating Profit Margin > 15-20%
Healthy margins signal operational strength and pricing power.

Three-Year Sales Growth > 15%
Sustained growth suggests rising demand and a competitive edge.

Interest Coverage Ratio > 5
Higher coverage means better capacity to manage debt obligations.

Market Cap to Sales Ratio Helps investors avoid overvalued stocks relative to revenue generation.

Promoter Holding > 50%
High promoter stake often signals confidence in the company’s future prospects.

“Stick to these filters,” Chokshi advises, “and you’ll dramatically improve your odds of finding the next wealth-creating multi-bagger.”

Multibaggers for 2025

Even in the more subdued market of 2025, a handful of companies have managed to buck the slowdown and deliver outstanding returns. According to Equitymaster, these are some of the names that stand out:

Garware Hi Tech Films has undergone a dramatic transformation from a commoditised polyester film manufacturer into a value-added consumer product player. This strategic pivot has pushed its stock up 184% in just one year. The company targets ₹25 billion in revenue by FY26, riding on higher-margin products.

Shaily Engineering Plastics has surged 197% over the past year. Specialising in high-precision injection moulded plastic components, it serves major clients across the healthcare, consumer, and industrial sectors, positioning itself as a leader in niche manufacturing.

V2 Retail, focused on affordable fashion for India’s growing middle class, soared 250%. Its aggressive expansion into tier-II and tier-III cities has driven strong revenue growth, cementing its presence in the value retail segment.

Kitex Garments, one of the world’s largest infant wear exporters, delivered a whopping 300% return. With a dominant market share in the US, it now eyes further growth in Europe and Australia and plans to diversify into adult wear.

Camlin Fine Sciences surprised the market with a 162% gain, driven by its diverse portfolio in specialty chemicals, despite moderate financial growth metrics in recent years.

Equitymaster emphasizes that while the era of easy money may have paused, disciplined analysis remains the key to finding future multibaggers. Even in a cautious market, true wealth creators can emerge — for investors patient enough to dig deep and apply the right filters.