Stock Picks

Smallcap Multibagger Ideas for FY 2018

Markets are close to all time highs and the small caps and mid caps space is on a boom! In this article we share some small caps that can give "multibagger" returns:

Note: Raghav Behani is a SEBI registered Research Analyst. The stocks discussed below may or may not be recommended to our clients. To get stock picks with proper ENTRY/EXIT levels click here.

i) Pincon Spirit:
Market Cap: Rs 294 Crores


Pincon spirit is the flagship company of PSL Group which operates in the following segments:

- IMFL
-IMIL
- Retail Chains
-FMCG

Positives:
- The company has seen a fast growth in sales and profits
- The ratios appear decent for margins and returns
- Valuations are not expensive

Negatives:
- The company has a big pile of debt in it's books and it is constantly rising
- The company is losing cash big time and is unable to convert profits into cash
- The company has low interest coverage ratio
- Low promoter holding

ii) Poddar Pigments:
Market Cap: Rs 270 Crores



Poddar pigments manufactures colours and additive masterbatches. It is the first company in India that manufactures masterbatches for Nylon, Polypropylene and polyester multi filament.

Positives:

- 5 Year growth rate is healthy for sales and PAT figures
- Company has decent ROE
- Very low debt levels

Negatives:

- Short term growth is in single digits
- Margins are falling
- Company enjoys little/NO pricing power

iii) Sukhjit Starch
Market Cap: Rs 207 Crores


The Punjab based starch manufacturer trades at low PE levels. Does it have the potential to give 3x-4x returns?

Positives:

- Low PE, leaves room for PE expansion
- Debt equity ratio is low
- Promoter holding is 60% +

Negatives:

- Company is unable to maintain margins
- ROE is low
- Margins are trending lower

iv) Indo Borax (IBCL):
Market Cap: Rs 85 Crores


This stock is part of our free portfolio. You can look it up here: Free Portfolio

v) Medi Caps:
Market Cap: Rs 27 Crores


The empty hard gelatin capsule maker could be a good proxy investment for the booming pharma industry in India.

Positives:
- The company has a P/BV ratio of just 0.33
- The company has no debt
- The company can benefit from a booming pharma industry

Negatives:
- Short term growth has hit a bump
- Margins are trending lower
- The company has extremely low ROE


The stocks shared here may or may not be advised to our clients. To get long term investment ideas in equities:

i) Full up this form: Investment Advisory
ii) Drop in an SMS to 9642034151
iii) Drop in an email: raghav@dalalstreetbulls.com
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