Vinati Organics, Varun Beverages, APL Apollo Tubes: 7 multibagger stocks with up to 48% upside potential

Indian markets are on a roller coaster ride as worries over banking contagion in the developed world continue to hurt sentiments, prompted by the crisis at Silicon Valley Bank (SVB).  

Experts believe that this volatility is not going to end any time soon. According to Vinod Nair, Head of Research at Geojit Financial Services, the volatility in the market is expected to continue in the short term as the global banking system is yet to fully recover from the crisis, especially in Europe.

"FPIs are likely to be cautious in the near-term since there is a risk-off in equity markets globally due to the stress in the US banking system and crash in banking stocks," Nair added.

However, brokerage firms continue to remain bullish on a handful of stocks that have delivered a good amount of return in the long term. Take a look at some of the multibagger stocks that are under their coverage and still have up to 48% potential upside.

1) APL Apollo Tubes

Current share price: Rs 1189.75
Target price: Rs 1,440
Upside: 21%

Shares of APL Apollo Tubes have delivered over 7,000 return to its long-term investors in the last 10 years. The multibagger stock is up over 500 per cent in the last 5 years.

Axis Securities has a buy call with a target price of Rs 1,390-1,440. and a stop loss of Rs 1,160.

“APL Apollo Tubes on the weekly chart has decisively broken out above the 'consolidation zone' between Rs 1,200-1,000 levels in mid of February 2023. It retested the breakout area and is expected to continue an uptrend. The stock is holding above the medium-term upward-sloping trendline which is in place since the start of August 2022. The stock is forming a higher high-low on the weekly chart. This formation indicates a positive uptrend. The weekly strength indicator RSI is in bullish mode and the weekly RSI crossover above its reference line generated a buy signal. The above analysis indicates an upside of Rs 1,390-1,440 levels,” said the brokerage.

2) Varun Beverages

Current share price: Rs 1360.10
Target price: Rs 1,620
Upside: 19%

Shares of Varun Beverages have delivered multibagger return to its shareholders. The large-cap stock has delivered over 200 per cent in the last two years and over 640 per cent return in the last five years. It is also up over 112 per cent in the past one year.

Motilal Oswal has a 'Buy' rating on the stock with a target price of Rs 1,620. It
expects the company to maintain its earnings momentum, underpinned by high demand due to the early onset of summer, high temperature and further possibility of an El Nino event, increased penetration in newly acquired territories in South and West India, and higher acceptance of newly launched products.

3) NOCIL

Current share price: Rs 203.85
Target price: Rs 280
Upside: 37%

NOCIL stock has delivered multibagger return to its long-term shareholders as it has zoomed over 1360 per cent in the last 10 years. If you look at the current share price, the stock is down over 31 per cent from its 52-week high of Rs 294.85, hit on September 12, 2022

Motilal Oswal has a 'Buy' rating on the stock with a target price of Rs 280. The brokerage, in its recent report, highlighted that the management of the company guided for debottlenecking in its existing units by Aug/Sep’23, even as it evaluates its plans for the next three-to-five years. Currently, specialized products constitute 25% of its total revenue with little room for expansion (the industry standard is less than 10%).

Despite global rubber consumption remaining flat in CY22 v/s CY21, due to the current global slowdown, NOCIL has been able to maintain its market share during the period, it said. Further, management expects that Europe+1 could play out over the medium term with no likely capacity constraints in the near future.

4) Balkrishna Industries

Current share price: Rs 1937.15
Target price: Rs 2,378
Upside: 23%

Shares of Mumbai-based Balkrishna Industries Limited (BIL) have delivered multibagger returns to its long-term shareholders as the stock has zoomed over 1,300 per cent in the last 10 years.

ICICI Securities has a 'Buy' rating on the stock with a target price of Rs 2,378 per share. It said that the company's revenue share within India's off-highway tyre (OHT) exports will return to 50 per cent in a couple of quarters, post full reversing of the inventory situation at the distributor end to steady-state.

The brokerage expects the first half of FY24 to be impacted by the elevated base of H1FY23, the deflationary effect on realisation, and recessionary fears in key markets (which would depress OTR demand).

5) South Indian Bank

Current share price: Rs 16.69
Target price: Rs 25
Upside: 48%

ICICI Securities remains positive on South Indian Bank, which has delivered multibagger returns to investors in the last three quarters. The brokerage said that the revamped business model of the private lender is yielding positive results and believes an improving profitability trajectory to continue. It has a 'Buy' rating with a target price of Rs 25 on the stock.

Shares of South Indian Bank have delivered more than 155 per cent return from its 52-week low at Rs 7.27 on June 20, 2022.

6) Vinati Organics

Current share price: Rs 1725.45
Target price: Rs 2,148
Upside: 24%

Shares of Vinati Organics have delivered a whopping 3,327 per cent return to its long-term shareholders in the last 10 years.

Geojit Financial Services believes that the revenue growth momentum is expected to continue, given the strong demand for its key products, capacity expansion and higher contribution from new products.

It has maintained a 'Buy' rating on Vinati, with a target price of Rs 2,148. Synergies owing to backward & forward integration, strong cash flows, healthy balance sheet and ROCE & ROE of above 24% (5yr avg.), instil confidence, it said.

7) Shree Cement

Current share price: Rs 25579.45
Target price: Rs 29,130
Upside: 14%

Shree Cement stock has recovered over 43 per cent from its 52-week low of Rs 17,900, hit on June 20, 2022. The multibagger stock has delivered over 500 per cent return in the last 10 years.

ICICI Securities recently interacted with the management of Shree Cement (SRCM) for an update on their business strategy and general industry outlook.

It highlighted that the company has formed a Technical Services team (also comprising civil engineers) which will not only provide expertise to construction activities but also improve sales through close interaction with customers. The company also aims to increase premium cement (higher by Rs25/bag vs normal cement bag) share to 15% from 7% currently.

The brokerage has maintained a 'Buy' rating on the stock with a target price of Rs 29,130.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Business Today)