Bluechip Multibagger Stocks to invest in 2021

4 Bluechip Multibagger Stocks to invest in 2021

Bluechip Multibagger Stocks to invest in 2021Bluechip Multibagger Stocks to invest in 2021


Blue-chip stocks have always provided steady returns to investors. But can a blue chip stock turn to be multibagger stock in the medium to long term? Investors have always been hunting for multibagger stocks, however identifying such stocks is difficult. There are several key parameters one can analyze like EPS growth, consistent ROE, debt to equity ratio, interest leverage ratio etc. for a company. If any company is stable and consistent in these parameters, such blue chip stocks can turn to be multibagger stocks. Which are the best blue chip stocks to invest in 2021? Which are the blue chip stocks that are potential multibaggers to invest in 2021?

Also Read: 5 Midcap multibagger stocks that gave 1100% returns in 5 years

What are bluechip companies?

Blue chip companies are stalwarts of the industry, which are matured companies. Such blue chip companies are stable, profitable and sustainable in the long term. Such companies can always reward investors if invested for medium to long term.

How we filtered Bluechip Multibagger stocks to invest in 2021?

Here are key parameters we applied in filtering blue chip multibagger stocks.

1) ROE > 20%: Companies that are able to generate a return on equity (ROE) of > 20% average in the last 5 years are considered here.

2) EPS growth > 20%: Companies that are able to provide value to investors with EPS growth of > 20% average in the last 5 years are considered.

3) P/E to growth <1.5: Here we are comparing the P/E ratio with the growth of the company and filtering if such P/E to growth < 1.5. If it is more than 1.5, while the company might be good, it share price is high.

4) Consistent ROE: Here we checked that company is able to generate 20% ROE consistently. If in one year company missed ROE > 20%, such company is ignored. Consistent performing bluechip stocks have always rewarded investors.

5) Debt to equity ratio < 2:  Debt to equity ratio is company liabilities over shareholders equity. In this parameter, we have checked debt the equity should be < 2. Means company uses twice the value of debt compared to shareholders equity (e.g. Rs 10 crores of shareholders’ money and 20 crores from debt).

6) Interest coverage ratio > 2: This parameter would help to determine how efficiently a company can pay off its share of interest expenses on debt. The ideal ratio should be more than 2.

7) Market cap> Rs 7,500 Crores: We have filtered stocks that have atleast Rs 7,500 Crore market cap to ensure proper liquidity in the stock market.

4 Bluechip Multibagger Stocks to invest in 2021

Based on the filters applied, here are the blue chip multibagger stock list.

#1 – APL Apollo Tubes Limited

#2 – Gujarat Gas Limited

#3 – Coromandel International Limited

#4 – KEC International Limited

4 Bluechip Multibagger Stocks to invest in 2021 – Detailed Analysis

Now let us get into more detailed analysis.

#1 – APL Apollo Tubes Limited

APL Apollo Tubes Limited is the largest producer of Structural Steel Tubes in India. They have an extended distribution network of warehouses and branch offices in 29 cities across the country catering to domestic as well as  20 countries worldwide.

Key Parameters Check

a) ROE > 20% in the last 5 years – This company ROE is 20.5% – Passed

b) EPS growth > 20% in the last 5 years – This company EPS growth is 27.7% – Passed

c) Consistent EPS growth > 20% – Passed

d) P/E earnings growth < 1.5 – This company has 1.3 – Passed

e) Debt to equity < 2 – This company has 0.62 ratio – Passed

f) Interest coverage ratio >=2 – This company has 3.76 – Passed

How is the share price performance in the last 5 to 10 years?

10 Years annualized returns – 40% (2,800% in simple terms)

5 Years annualized returns – 43%

1 Year returns – 133%

1 month returns – 28%

#2 – Gujarat Gas Limited

Gujarat Gas Limited, is an Indian natural gas distribution company. The Gujarat State Petroleum Corporation owns the company. Established in 1980, and headquartered in Ahmedabad, the company operates primarily in Gujarat. It is India’s largest City Gas Distribution company.

Key Parameters Check

a) ROE > 20% in the last 5 years – This company ROE is 20.96% – Passed

b) EPS growth > 20% in the last 5 years – This company EPS growth is 20.97% – Passed

c) Consistent EPS growth > 20% – Passed

d) P/E earnings growth < 1.5 – This company has 1.19 – Passed

e) Debt to equity < 2 – This company has 0.6 ratio – Passed

f) Interest coverage ratio >=2 – This company has 6.89 – Passed

How is the share price performance in the last 5 to 10 years?

5 Years annualized returns – 25% (200% in simple terms)

1 Year returns – 48%

1 month returns – 10%

#3 – Coromandel International Limited

Company is India’s second largest Phosphatic fertilizer player, is in the business segments of Fertilizers, Specialty Nutrients, Crop Protection and Retail. The Company manufactures a wide range of fertilizers and markets around 4.5 million tons making it a leader in its addressable markets.

Key Parameters Check

a) ROE > 20% in the last 5 years – This company ROE is 21.41% – Passed

b) EPS growth > 20% in the last 5 years – This company EPS growth is 28.76% – Passed

c) Consistent EPS growth > 20% – Passed

d) P/E earnings growth < 1.5 – This company has 0.64 – Passed

e) Debt to equity < 2 – This company has 0.38 ratio – Passed

f) Interest coverage ratio >=2 – This company has 6.86 – Passed

How is the share price performance in the last 5 to 10 years?

10 Years annualized returns – 11% (200% in simple terms)

5 Years annualized returns – 34%

1 Year returns – 54%

1 month returns – minus 1%

#4 – KEC International Limited

KEC International is based out of Mumbai and is the flagship company of the RPG Group. A USD 1.7 billion Engineering, Procurement, and Construction (EPC) major, they deliver projects in key infrastructure sectors such as Power Transmission & Distribution, Railways, Civil, Urban Infrastructure, Solar, Smart Infrastructure, and Cables.

Key Parameters Check

a) ROE > 20% in the last 5 years – This company ROE is 20.43% – Passed

b) EPS growth > 20% in the last 5 years – This company EPS growth is 25.88% – Passed

c) Consistent EPS growth > 20% – Passed

d) P/E earnings growth < 1.5 – This company has 0.67 – Passed

e) Debt to equity < 2 – This company has 0.85 ratio – Passed

f) Interest coverage ratio >=2 – This company has 2.96 – Passed

How is the share price performance in the last 5 to 10 years?

10 Years annualized returns – 14% (281% in simple terms)

5 Years annualized returns – 19%

1 Year returns – 20%

1 month returns – minus 3%

You may like: Performance of Multibagger Midcap Stocks invested by Rakesh Jhunjhunwala

How to invest in these blue chip multibagger stocks?

You got to know about its various key ratios and share price performance in the last 5 to 10 years. One can invest and accumulate such stocks on every market correction / dip. Since equity stock investments is high risk, only high risk investors should invest in such stocks.

Disclaimer: I do not hold any stock as of the day of writing the article. However, I may purchase such shares at any time.

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Suresh KP

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