17 midcaps that can turn out to be multibaggers

Investors searching for the next multi-bagger on Dalal Street could consider some of the stock picks of Goldman Sachs. The brokerage has identified 60 stocks which could be potential multi-baggers from current levels. Among the large-caps, HDFC Bank, ICICI Bank, State Bank of India, Bharti Airtel and Maruti Suzuki India are the potential winners.

Since many of these blue chips are well-researched and widely-owned, ET looked into Goldman’s picks in the mid-cap space that it considers will multiply in value over the next few years.

The Goldman study showed that a seven-fold growth in the economy over the last two decades has helped India create the highest number of multi-baggers within a group of 10 emerging and developed market peers.

As many as 269 companies which were part of the Nifty 500 index have generated over 10 times returns over a rolling five-year period in the last 20 years, helped by one or more of these -- high earnings/ sales growth rates, high return ratios, a small or mid-cap bias, strong domestic concentration, inexpensive starting valuations and high promoter holding.

ET has shortlisted 17 stocks from Goldman’s list of mid-cap companies that meet at least five of the above mentioned criteria. These companies are from the consumer discretionary, consumer staples, financials, healthcare, industrials, technology and communications space and their sub-sectors, with high correlation to domestic growth, and prospects of high earnings growth over the years.