Multibaggers in disguise? Why some underperformers today could be market stars tomorrow

As quarterly earnings dominate investor attention, market experts are warning that an obsession with short-term performance may cause investors to overlook future multibaggers in sectors like manufacturing and pharmaceuticals.

With India’s manufacturing cycle gaining strength and pharmaceutical exports and capex on the rise, analysts are flagging companies that are consciously trading near-term profitability for long-term growth. These firms are investing heavily in research, expanding capacity, and making strategic acquisitions that could unlock significant future value.

Gurmeet Chadha, Managing Partner and CIO at Complete Circle Consultants, urged investors to look beyond quarterly earnings in a recent post on X. “In manufacturing and pharma, look at companies investing heavily in R&D, doing focused capex or strategic acquisitions taking calculated risk,” he wrote. He added that while such moves may dent return ratios and earnings per share in the short run, they are often key to unlocking long-term rewards. “Too much focus on QoQ can make u miss some multibaggers,” he warned.

Several others echoed Chadha’s view. Commenting on his post, investor Rohan Tantia wrote that companies investing ahead of the curve may appear expensive or show weak short-term metrics, but these are signs of future cash flow potential rather than inefficiency. Kuldeep Verma added, “Short-term dips hide long-term winners. Focus on growth, not just quarterly results.”

The takeaway from these market voices is clear. In sectors like manufacturing and pharma, companies making bold capital deployment decisions today may not shine in quarterly scorecards. However, these firms could turn out to be the biggest wealth creators in the coming years.