Thursday, October 22, 2009

Magic stocks or mad?-Recent multibaggers

Dear Readers,

I wish to discuss about the multibagger concept again in the wake of recent market budges. Basically the concept is one of my close preferences and I am always keen to monitor such episodes in the market. For any investor, buying stocks which can be multibaggers are the most appealing option. But how does one spot a multibagger. So far, the question is unanswered. You may get more confused after reading this article and I am really sorry for that.

Probably, we talk about the multibagger concept with a long term outlook, but sometimes it happens with in no time, where all the fundamentals, technicals, industry perceptions, growth perspectives, economical supporting scenarios, managerial competence and other related elements, everything or few of them befalls claptraps. I would like to share my findings on such a juncture, none a surprise, but it is there.

I have an excel sheet of BSE stock prices on 02nd April 2009 in my archives. I usually keep the entire price list of certain days for a future review. I was analyzing the performance of various scrips comparing with the prices of 20 October 2009 as part of my homework. It is really surprising and the findings are mind-boggling. I found such scrips which earned more than 1000% returns in just 6 months, more than 2200% return in a year. Is it possible? I am trying hard to make believe my eyes as it is unusual in the market with in such a short span of time.

Right now, I am not paying attention to discuss the exact reasons behind such rocket moves, rather I wish to state my findings and figures as well. Please rectify me if anything noticed wrong and I shall grateful for that. I am not sure about the exact number of stocks listed in BSE, but my analysis based on the stocks traded on or between 02 April 2009 and 20 Oct 2009. We have to keep in mind that the accrued overall gain by BSE Sensex for last 6 month is around 115%, from the lowest 8000 levels to ongoing 17000 mark. And let us compare the findings with this as a benchmark.

Let me list some real magic or mad stocks for you:-

BSE Code -531358
Scrip-Choice International
Sector - Investment and Finance
Price on 02 April – 13.15
Price on 20 October – 150.00
Gain – 1041%(6 months)
52 Wk Low – 6.50 ( Yearly gain 2207%)

BSE Code -517973
Scrip -DMC International Ltd
Price on 02 April – 2.26
Price on 20 October - 24.85
Gain – 1000%(6 months)
52 Wk Low – 1.66 (Yearly gain 1397%)

BSE Code - 533055
Scrip-Edserv Softsystems
Sector – Education/Software
Price on 02 April - 21.60
Price on 20 October – 233.90
Gain – 983 %( 6 months)
52 Wk Low – 18.70(Yearly gain 1150%)

BSE Code - 526544
Scrip - Scanpoint Geomatics Ltd
Sector – Niche (GIS and Image Processing Software, IGIS Mobile GIS, Q-Pad etc..)
Price on 02 April - 3.47
Price on 20 October – 34.50
Gain – 894 %( 6 months)
52 Wk Low – 2.07(Yearly gain 1566%)

BSE Code - 531882
Scrip - Kwality Dairy (India) Ltd
Sector – Food Processing
Price on 02 April – 97.30
Price on 20 October – 900.90
Gain – 826%(6 months)
52 Wk Low - 14.60(Yearly gain 6070%)

I have placed the details of 5 toppers above. I would like to state again, I am not yet scrutinized the exact reasons behind such rocketing of scrips mentioned here, whether it was related to speculations or anything else. I am examining one by one to find the probable reasons behind such unbelievable darts as well as their sector profiles. The list is lengthy and I will certainly provide some brief statistics on the same.

The following %age return figures are from approximate 6 months (02 Apr 2009 to 20 Oct 2009)

Number of stocks gained more than 150% returns - 434

Number of stocks gained more than 200% returns - 220

Number of stocks gained more than 250% returns - 124

Number of stocks gained more than 300% returns - 91

Number of stocks gained more than 350% returns - 64

Number of stocks gained more than 400% returns - 40

Number of stocks gained more than 450% returns - 28

Number of stocks gained more than 500% returns - 21

Number of stocks gained more than 550% returns - 20

Number of stocks gained more than 600% returns - 13

Number of stocks gained more than 650% returns - 11

Number of stocks gained more than 700% returns - 10

Number of stocks gained more than 750% or 800 % returns - 7

Number of stocks gained more than 850% returns - 4

Number of stocks gained more than 900% or 950% returns - 3

Number of stocks gained more than 1000% returns - 2

As a common trend, the majority of scrips comes under Small Caps (almost 80%) which seized more than 300% gain in a 6 month duration.

The single highest category of gainers is from small non banking institutions involved in financial sector, but most of them are unheard.

The majority of Mid caps restricted with a decent gain of 150 – 300%.

A large number of gem penny stocks are also played their roll well in the team with more than 400% gain.

I wish to conclude this post as it is getting lengthy, but will share this data to my regular clients for free of cost by mail.

Readers are requested to comment whether negative or positive which encourage me to bring more in this row.

The above information is a pure history and I am not responsible for your investment decisions based on the data above. Please do your own research before make any investment.

Warm regards

Shabu Thachat –



  1. Shabu,

    Really a great work. As you said, we can't dig deep why these appreciations happened in the first place for some of these stocks. But I believe, promoters and Initial investors play a huge part in driving up the stock price creating speculation in the market. But I do not understand why on earth Kwality Dairy (India) Ltd is valued so high. Are they into new business ventures?......No idea. Again Edserve Systems. I think the IPO of Edserve was only a year back and this has gone up like crazy.....Wonderful work and I donno where you get this data....

  2. Dear Kumaran,

    Thank you for the heartening comment.

    I am in search to find the possible reasons one by one. The ground you specified is apt in certain cases, but few of them missiled due to pure FII interventions.

    Some scrips have the real growth potential too in the future and I hope we might have to find a superlative degree of the word multibagger to depict them.

    The comparison and dreaming with Educomp's vertical growth is played a major role in the bulleting of Edserv.

    About Kwality Diary, the promoters have a stunning 83%, but got to know that a couple of bombay based operators playing behind this stock by last few years, I expect an inevitable crash in very near future.

    I just processed the data available on net, using some simple database tools.

    Thanks again

  3. Hello Shabu,

    Nice work on Small caps counters. Or rather should I say Penny stocks? I feel dealing in such stocks is more than dangerous from risk perspective.

    No doubt, they offer mind-boggling returns, but who knows which stock will click in such a bonanza manner??

    Also, as per one finding on Small-cap stocks...

    Either investors/traders of such stocks book out too soon (say, for example, profit booking at 100-200% returns as against 500% returns that such stocks may offer)


    Riding on the back of big rallies based on the sentiment of greed factor with meteoric rise in such stocks, but people miss booking profits altogether at higher levels & prove out to be mere spectators when the same stocks come down circuit after circuit.

    So... the story is either of partial success or No success at all, based on pre-mature booking of gains or missing the liquidation part altogether - whichever option is exercised by the trader/investor.

    Coming to one of the more well-known mid-caps in Edserv, I feel the stock has gone up purely on the prospects of the fast-emerging Education sector rather than the stock fundamentals, in specific.

    However, I would have loved if you had added some bit of reasoning & justification or de-justification for such meteoric rise in the stocks mentioned by you. No matter even if would have meant a bit lenthy article. All in all, a nice effort by you without taking anything away for your hard work towards your blog readers.

  4. can u comment on stock value mart (bse code 532338)

    thanks n regards

  5. Dear Viral,

    Thanks for the analytical comments.

    The both counters you specified is applicable to all type of stock in some way, whether it is Small, Mid or large Caps.

    Yes, as you said, no one can spot the exact entry or exit point, but my effort was to highlight the returns or ignite a discussion on the issue rather discover the success rate in pennies.

    As I mentioned earlier, I am in effort to scrutinize the things one by one, which taking considerable time to make a worthy assessment. I will try to put another post on this subject in recent future.

    Thanks again a lot for your critical and worthy comment.


  6. Kingavs,

    I am just seeing Value Mart as one of the deteriorating companies from thousands of IT sector. Nothing to comment on it as they made again a 32.69% decline in the Jun qtr. I have not added this scrip yet to my penny list.

    With all respect, I expect some worthy comments too rather specific stock queries.


  7. Shabu,

    Can you please share anything on this?

  8. Dear Mr Ajay,

    I would not like to make any specific comment on the blog you reffered.


  9. respected sir;
    wts your opinion abt himalaya international limited..?

  10. shabuji;
    as u r master of small script i want to know your opinion on himalya international limited and adinath bio tech....please send yr view.
    thanks sir

  11. Good post.....Valuable information for all.I will recommend my friends to read this for sure…



The blog is associated with information on Indian stock market and author’s investment view points on various emerging stocks/sectors. The contents discussed in this blog are purely my own personal opinion and in no case weigh it as any kind of recommendation for stock market investment. The sheer purpose of this blog is to educate the interested community on market related subjects based on my experience and I am, in no way, responsible for investment decisions based on the contents described in this blog.

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