These multibagger stocks grew by 500% in 2022. What is driving the rally?

2021 was a year of record highs for the Sensex and Nifty, the year of initial public offerings (IPOs) as retail investors rushed to join the frenzy.

Though the IPO market is expected to be bullish as of 2021, sentiment has soured amid geopolitical concerns globally and concerns about a Fed rate hike. This worries investors.

But at a time when the market has weakened, many stocks in the microcap and smallcap space have become multibaggers since the beginning of calendar year 2022.

You read it right In nearly 30 trading sessions, some of these stocks have gained as much as 500 per cent.

let’s take a look…

#1 KIFS Financial Services

The stock which is at the top 2022. K Multibagger Stock List of Non-Banking Financial Company (NBFC) KIFS Financial Services.

The company’s stock has been falling steadily, gaining 5% continuously every day since December 31, 2021.

This is a 5% gain in 30 consecutive sessions.

So far this year, it is a massive increase of 500%. The company’s share price chart will surely make you wonder – what is driving this stock post the sluggish 2021?

Huge boom in KIFS financial services

When BSE sought clarification on the sharp rise, here’s what the company replied in an exchange filing last month:

The volatility of the pricing on the stock exchange is not related to the information or decision taken by the company. This is purely a speculation on market trading, which has nothing to do with the company or its promoters.

As you can see, there is no development behind the bullish rally of 500% which has left the market observers puzzled.

Barring increased sales and a huge jump in free cash flow, the company’s financials is nothing to write home about as well.

financial snapshot

, m standalone)	FY17	FY18	FY19	FY20	FY 21
gross sales	84.9	60.5	59.0	156.0	210.4
sales growth (%)	19%	-29%	-3%	164%	35%
Net Profit	33.5	30.0	28.2	39.4	37.9
profit margin (%)	40%	50%	48%	25%	18%
free cash flow	25.8	13.9	3.3	18.7	314.3

Source: Equitymaster

Even in weaker markets, shares of KIFS Financial Services hit the upper circuit band when benchmark indices Sensex and Nifty declined.

What does the company do? It offers capital market products such as margin trading, debt against shares (LAS) and financing of primary market issues for retail investors.

It is part of the Khandwala Group and is a subsidiary of the group owned business arm KIFS Commercial Pvt.

Khandwala Group has an established presence of over 30 years in various businesses including Stock and Commodity Broking, Depository Services, PMS, Housing Finance Loans, Bullion Trading, Real Estate as well as Arbitrage Trading.

While there is no definite reason for this rally, it could be due to the company’s performance in the December 2021 quarter.

This week, the company came out with its quarterly results, where it reported a nearly 2-fold increase in its net profit. 12 m This was compared with last year’s data 4 m

Sales also saw an increase and jumped 228% than 102 m 31m reported in the year-ago quarter.

#2 Peace Educational Initiative

A similar rally is seen in the stock of Shanti Educational Initiatives, similar to KIFS Financial.

It is up 300% since the start of 2022, hitting the upper circuit continuously for the past 30 days.

Close up of smallcap stocks from 95 385 today, appreciating nearly 300% year-over-year (YTD).

Shanti Educational Initiatives is engaged in the business of providing education services and activities.

For the financial year ending March 2021, Shanti Educational saw a steep rise in net profit as compared to the figures for 2020. profit increased Only . to 21.3 m 0.7 m a year ago. That too when its sales suffered a setback.

Last month, the company announced its results for the quarter ended December 2021, where the company’s topline saw a massive 463% growth. compared to 10.1 billion 1.8 billion last year.

But the increase in topline was not enough as the company incurred a loss of 6.3 billion

#3 White Organic Retail

Next on our list we have a retailing company called White Organic Retail.

It is engaged in the trading of agricultural products including organic and other products. The company is a supplier of essential oils and aromatics and cereals in India.

It sells 230+ different products in a wide range of categories under its own brand – White Organics.

The company is positioned as a niche player with a focus on organic products aimed at the lifestyle and health conscious customer segment.

Last year, the company entered into strategic tie-ups with delivery chains like Zomato and Swiggy to distribute its products.

There was a huge corporate rejig last year when the promoters of the company sold their entire 55% stake to Sumaya Industries.

Shares of White Organic Retail have seen a huge jump since November last year. The market has rewarded the company’s shareholders despite reports of declining profits and sales in the last two financial years.

But the company’s quarterly performance is remarkable. The corporate reshuffle by the company last year saw an increase in both sales and profitability.

White Organic Retail Quarterly Display

, m consolidated)	December-21	December-20	Sept-21	Year after year (%)	QoQ (%)
gross sales	607	165	54	269%	1023%
total expense	538	162	55	232%	878%
operating profit	70	6	,	974%	,
Net Profit	52	5	4	977%	1200%
net profit margin	9%	3%	7%	,	,

Source: Equitymaster

No wonder the stock has been plummeting since the beginning of the year. since the ascent of 29 In April last year, the stock has gained over 2,400% and is currently . doing business on 793. On a YTD basis, the stock is already up 200%.

24x in a year

#4 DB Realty

Shares of DB Realty are likely to see some more upside gains, up 175% since early 2022.

Why? The stock is in the news partly because renowned investor Rakesh Jhunjhunwala and his wife have bought 20 million warrants in the company.

The company has recently come up with its fund raising plan where it has attracted well-known investor Rakesh Jhunjhunwala to pick up some stake.

Even as Godrej Properties called off its planned investment in a Mumbai-based real estate developer, it attracted a smattering of other investors, including Rakesh Jhunjhunwala.

DB Realty on Monday this week informed that its board has approved raising of funds by issuing 50 million warrants to non-promoter investors.

Of this, the company will allot 10 million warrants to Rakesh Jhunjhunwala’s venture capital firm Rare Investments, Rekha Jhunjhunwala, Abhay Chandak and Aditya Chandak respectively. These warrants are convertible into an equal number of equity shares.

Market experts suggest that this is huge for DB Realty as the company has substantial land parcels and ongoing projects in Mumbai.

company will increase 15.8 billion from this issue of warrants and become debt free by March 2022.

Here’s what the company said in the exchange filing…

from the extreme responsibility of 41.4 billion, the company expects to be debt free in the near term. Going forward the focus of the company is to partner with established large real estate developers to unlock the value of their large real estate portfolio.

Note that Rakesh Jhunjhunwala has been in this stock for more than nine years. Jhunjhunwala first bought stake in the company in October 2012. 90 per share.

While Jhunjhunwala’s move may make you want to invest in this company, you should know that the company is currently deeply in debt and has a track record of consistently running losses.

financial snapshot

, m consolidated)	FY17	FY18	FY19	FY20	FY 21
gross sales	2,884	2,880	4,732	2,864	1,338
sales growth (%)	-21%	0%	64%	-39%	-53%
total loss	(803)	(2,843)	(2,247)	(4,350)	(1,461)
total debt	15,493	17,342	20,950	21,910	25012
Debt Against Equity (x)	0.56	0.69	0.94	1.41	1.87

Source: Equitymaster

The company has also been accused of money laundering, and is under investigation by the Income Tax Department.

Not only this, he has been accused of non-payment of lenders and his projects have not seen any significant progress.

Is all this going to change? Only time will tell. On YTD basis, the stock is up 175% while it has gained a whopping 600% in the last one year.

Data Source: Ace Equity

To know more, see DB Realty’s Financial Factsheet,

Which other stocks have already delivered multibagger returns in 2022?

Apart from the above, here are the multibagger stocks of 2022.

company	Price Dec 31 ’21	Price Feb 11 ’22	Change (%)	market cap ( bn)
vegetable products	24.5	60.3	146%	6.6
cultivation nitro chemistry	57.4	138.7	142%	27.1
IL&FS Engineering & Construction	7.1	17.2	142%	2.2
SPML Infra	27.6	57.2	107%	2.1
Ratonsha International Rectifier	204.5	421.6	106%	2.9

Source: Equitymaster

The key to identifying multibagger stocks…

As a retail investor, if you are looking for multibagger stock in indiaYou should weigh all the pros and cons before investing in any company.

An investor’s goal should be to look for a good investment and not a multibagger. This is because you should have a complete process for investing that meets all your criteria.

If you go in with the assumption that every stock you invest in will be a multibagger, you will be disappointed. It won’t work that way.

the future is unwritten. Your reasoning for buying the stock may change. For this you have to be careful. The idea should be to buy a good quality stock of a company, look for a business that has a solid foundation, sound growth strategy, attractive valuations, ethical business practices and exceptional management team.

As long as these factors are present, you should stay invested for the long term rather than getting agitated by short term market volatility and price fluctuations.

Happy investment!

Disclaimer: This article is for informational purposes only. This is not a stock recommendation and should not be treated as such.

This article is syndicated from Equitymaster.com