Stocks To Buy: 2 Stocks That Have The Potential To Offer Multibagger Returns

Markets have seen a spectacular rally in the last few weeks, with the Sensex hitting 60,000 points and now clawing back some gains.

Time to look at stocks that offer multibagger returns

With the Sensex already near 60,000 points, the chances of getting multibagger returns from the largecaps is negligible. One has to dig deep and identify stocks that have the potential to generate good long-term returns or at least the chances of doubling money in the next 1-2 years. We have identified two such stocks, which have the potential to remain as multibbagers and could also be bought for the long term.

Krsnaa Diagnostics: Buy the stock for multibagger doubling in stock price

The company is a player in the diagnostics business with a unique public private partnership model. Krsnaa Diagnostics had come-up with an IPO at a price of Rs 954 per share. The stock has now halved and is available at Rs 465. The shares are also very close to its 52-week low of Rs 457.

In Q1 FY23, Core Revenue up by 10.5% y-o-y despite high base in Q1 FY22 due to second wave of Covid-19 EBITDA margins remained strong at 25.1% and improvement is expected from upcoming quarters with operationalization of new centres. According to the company, tests volume growth is visible in all modalities led by sharp increase in Tele-reporting tests.

Krsnaa Diagnostics: Good revenue visibility

Due to the company's long-term of contracts (between 5-10 years) with inbuilt price escalation mechanism ensures higher and consistent visibility of revenues. The government's focus on investing in healthcare at underpenetrated rural and municipal corporations will provide an impetus to PPP model of the company. The company also has a captive customer base, which is driven by both patient's visiting government hospitals and direct walk-ins driven by relatively cheaper rates with best-in class infrastructure and timely reporting.

Krsnaa Diagnostics: Attractively valued

The shares of the company also attractively valued at the current levels. The stock is trading at a price to earnings multiple of 20 times 1-year forward earnings, which is not expensive for a company that is growing fast. The stock has also dropped as much as 56% from its listing price, which makes it a good attractive pick at the current levels.

Buy India Bulls Real Estate Stock for multibagger returns

One of the big reasons to be buying the stock of IndiaBulls Real Estate, is that the net debt of the company is down from Rs 1,005 crores as at Q4 FY2022 to Rs 464 crores. The net debt to equity just 0.18 times, which is extremely good for a real estate company. The estimated Collection of Rs 600 Crores from sold inventory (net of project costs) & Rs 500 crores from Land Sale in next 12 months should provide a boost to earnings.

Merger with Embassy group in final stages

The merger with the Embassy in final stages of NCLT review and the next hearing is scheduled in Chandigarh on 8th Sep, 2022. Once the merger is approved it could be a trigger for the stock. The shares are currently trading at Rs 79.80 and had surged to Rs 175. If it moves back to Rs 175 or slightly higher, it would mean multibagger returns. Looking at the estimated collection in the next few quarters, it looks like the company should be back in the black in the coming quarters.

Disclaimer

Greynium Information Technologies and the Author, are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to check with certified experts before taking any investment decision. Disclosure: The author owns shares in Krsnaa Diagnostics and India Bulls Real Estate.