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Indian Market has outsized many big opportunities, says Goldman Sachs.
As per Goldman Sachs, India is one of the emerging markets which provide intriguing long-term beta prospects. Past some decades, India’s economy has increased 7x, and that too with a nominal GDP compound annual growth rate of 10%.
According to an International Brokerage firm, 269 multi-bagger stocks in India all have six common characteristics and about 75% of shares have at least 4 traits.
Stocks like KPIT Technologies, Devyani International, FSN E-commerce Ventures, Kajaria Ceramics, Bharat Forge, and Bharat Dynamics are among 35 stocks in Multibaggers that satisfy 4 traits that were identified in multi-baggers of the past. Other names are Bata India, Kansai Nerolac, JK Cement, and VIP Industries.
The foreign brokerage stated that its study on emerging and developed markets which covered 10 baggers and 6700 stocks claims that about 54% of NSE 500(269 stocks) generated the largest proportion (10 bagger returns) amongst the 10 markets. While China (MSCI China) and Taiwan (TWSE) only had 18% On the other hand US (S&P 500) and Japan (Topix) had 16% stocks which generate 10 bagger returns, about one-third of the proportion of the stocks in India.
The following common traits which Goldman Sachs stated were
- High Realised growth rates
- High Capital Return Ratios
- Mid/small-cap bias
- Inexpensive starting valuations
- Domestic Sector Orientation
- High Promoter Holding
Among the above-stated factors, growth, valuations, size, and promoter holdings were more dominant factors. While the less influential ones were sector and capital allocations.
As per Business Today, Goldman Sachs India Large cap compounders basket has offered expected sales growth of about 17%, earning growth of 26% CAGR in the next three years. The list included HDFC, ICICI, SBI, Bharti Airtel, and Bajaj Finance among Varun Beverages, Eicher Motors, and Maruti Suzuki in the multi-baggers list.
- Kratika Agarwal
