Multibagger Stocks Multibagger

Multibagger stocks are equity shares that generate returns several times higher than the original investment, often due to the company’s strong fundamentals, innovative products, or rapid business expansion. The term “multibagger” was popularized by investor Peter Lynch, who used it to describe stocks capable of multiplying an investor’s wealth manyfold.

Key Features: Represent companies with sustained earnings growth and robust business models. Typically found in emerging sectors or undervalued companies with strong future prospects. Require a long-term investment horizon, as compounding and business growth take time. Offer high risk and high reward, often accompanied by short-term volatility.

Example: If an investor buys a stock at ₹100 and it rises to ₹500, it becomes a 5-bagger, meaning it has grown five times its original value.