Algo Trading


Stock Market Blogs

What is Multibagger Stock? September 07 2022Stock Market Education

Visit Count: 614

What is Multibagger Stock?

The term multibagger was given by one of the most famous renowned investor, Peter Lynch.  This term was used by him in his book “One Up On Wall Street”. He borrowed the term multibagger from the game of baseball. Lynch tried to relate the concept of a baseball game in the stock market by naming some stocks as multibaggers. In this article, you will learn the meaning of multibagger stocks and how to find them.

Meaning of Multibagger Stock

A multibagger stock is one that gives returns several times higher than the investment value i.e. 100% or more returns in a short span of time. Such stocks are undervalued with great fundamentals and possess high growth potential. Investors who are looking to earn good returns with decent risk appetite try their hands on multibaggers.

How to Find Multibagger Stocks

Finding a multibagger stock is not easy. However, the following indicators will help you identify multibagger stocks in the stock market.

· Performance History

Most analysts look at the past performance of the company to understand future trends. It gives an idea of how the company may perform in the current and future market conditions. If the firm is performing well despite lower revenues, it means that a business is performing well and have huge potential growth in the future.

· Debt Levels

Before investing it is important to keep a watch on the debt levels of the company. There is no benchmark regarding the appropriate debt levels for a company as it varies from business to business. However, a debt equity ratio not more than 30% for a company should be considered good. In simple words, it means that the debt levels of the company must be less than 30% of its equity value.

· PE Ratio

To get closer to identifying a multibagger stock, it is important to study its current price-to-earnings (PE) ratio. A PE ratio defines the ratio of its share price and earnings per share (EPS). Generally, the PE of the multibagger stocks grows faster than the stock price.

·Policies of the Company

The policies that govern a company play a vital role in its growth in the future. The policies of a company will determine how it will carry out its operations, management functions, etc. Understanding the policies is also important because any changes in them will impact the business, management, profitability and annual financial reports. Hence, before identifying multibagger stocks it is important to learn the impact of company policies on the stock price and future growth.

· Source of Revenue

Checking the revenue numbers is not enough when you are looking for multibagger stocks. You must do deep research to learn the source of revenue. A stock can become multibagger when business revenue is growing at the macro levels and it can scale up its operations.

· Valuations

Understanding the valuations is important before purchasing a stock for multibagger returns. Cheap valuations are always good when you are looking for stocks that can give multifold returns. A stock that is overvalued can lead to a drop in valuation. But when a stock is undervalued along with good fundamentals, it may start its upward journey soon.

· Industry

When you are looking for multibagger stocks it is wiser to pick stocks from an industry that can grow substantially in the next 5-10 years. If an industry is expected to have hurdles and setbacks in the coming future, it will be difficult to find multibagger stocks from that industry. Thus, pick stocks from an industry that has a higher potential to grow.

· Competitive Advantage

When a business has a competitive advantage, the probability of it turning into a multibagger is much higher. The competitive advantage helps the business in capturing higher market share and constantly increasing its revenues along with profitability. Most of the time companies that are ahead of their competitors turn into multibaggers.

The above mentioned are some of the indicators to find multibagger stocks. Investors can benefit the most from it only if they have the patience to hold such stocks in the long run. Just a few multibagger stocks can boost the overall returns of your portfolio but picking them is an art. You can master this art with constant learning in the stock market. 

Blog Enquiry

Prevent Unauthorized Transactions in your demat and trading account --> Update your Mobile Number/Email id with your Depository Participant and Stock Broker. Receive alerts on your Registered Mobile for all debit and other important transactions in your demat/trading account directly from CDSL and Stock Exchanges on the same day.........issued in the interest of investors...

1. Stock Brokers can accept securities as margin from clients only by way of pledge in the depository system w.e.f. September 1, 2020.

2. Update your Mobile Number & Email Id with your Stock Broker/ Depository Participant and receive OTP directly from Depository on your Email Id and/ or Mobile Number to create pledge.

3. Pay 20% upfront margin of the transaction value to trade in cash market segment.

4. Investors may please refer to the Exchange's Frequently Asked Questions (FAQs) issued by NSE vide. Circular No. NSE/INSP/45191 dated: July 31, 2020 and NSE/INSP/45534 and BSE vide Notice No. 20200731-7, dated: July 31, 2020 and 20200831- 45 dated: August 31, 2020 and dated: August 31, 2020 and other guidelines issued from time to time in this regard.

5. Check your Securities/ MF/ Bonds in the Consolidated Account Statement issued by NSDL/ CDSL every month.


  • 9 out of 10 individual traders in equity Futures and Options Segment, incurred net losses.
  • On an average, loss makers registered net trading loss close to ₹ 50,000.
  • Over and above the net trading losses incurred, loss makers expended an additional 28% of net trading losses as transaction costs.
  • Those making net trading profits, incurred between 15% to 50% of such profits as transaction cost
"As per the directives of CDSL and esteemed Exchanges, it has been made mandatory for every client to furnish their latest KYC details viz. Valid Mobile No., Email- Id & Income range on or before 31.05.2021 else your Account will be marked as Non Compliant and will be Freezed till the compliance of such requirement."
"No need to issue cheques by investors while subscribing to IPO. Just write the bank account number and sign in the application form to authorize your bank to make payment in case of allotment. No worries for refund as the money remains in investor's account."
"KYC is one time exercise while dealing in securities markets - once KYC is done through a SEBI registered intermediary (broker, DP, Mutual Fund etc.), you need not undergo the same process again when you approach another intermediary."
Dear Investor if you wish to revoke your un-executed eDis mandate, please mail us with ISIN and quantity on by today EOD."

INDIRA SECURITIES PVT.LTD. (SEBI REG.NO.):NSE TMID: 12866, BSE TMID: 663, CDSL DPID: 17000 SEBI REG. NO.: INZ000188930, MCX TM ID: 56470, NCDEX TM ID: 01277, CDSL REG. NO.: IN-DP-90-2015, CIN : U67120MH1996PTC160201




Indrendu Joshi. Email: Call : 0731-4797275

Investor grievance complaint :