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100 Bagger Stocks In Indian Markets Are Mostly Manufacturing Companies

ICICI Securities in an exhaustive report has concluded that traditional manufacturing and a few service companies form the bulk of the 100-baggers, sporting greater than 25% CAGR stock price appreciation (ex-dividends) over a 20-year period

By Govindraj Ethiraj
New Update
100 bagger stocks
On today’s episode, financial journalist Govindraj Ethiraj talks to Sanjay Agarwal, President of the 56 year old Electronics Industry Association of India (ELCINA) and also managing director of Globe Capacitors.

Our Top Reports For Today

  • [00:00] Stories Of The Day
  • [01:00] Nomura upgrades India to overweight from Neutral, markets look up
  • [02:34] 100 Bagger Stocks In Indian Markets Are Mostly Manufacturing Companies
  • [07:45] No Import licenses for laptops, but import management system, what’s really changed? 
  • [18:13] Akasa Air PIlots Can be Sued But Should The Airline Do So?
  • [20:42] Google is 25 years old. Lessons for longevity.

NOTE: This transcript contains only the host's monologue and does not include any interviews or discussions that might be within the podcast. Please refer to the episode audio if you wish to quote the people interviewed. Email [email protected] for any queries.


After JP Morgan lavished attention on India and Indian markets, more investment banks are following suit. 

All this comes after a brief lull of around 8 weeks in which we didn’t see many reports, I am not saying negative because all investment bank and brokerage reports in recent times have been positive.

Nomura, the Japanese financial giant which manages over $358 billion in assets worldwide has upgraded its stance on the Indian market from ‘neutral’ to ‘overweight’. 

In the Asia (excluding Japan) portfolio, the brokerage has recommended a weight of 18.2 per cent, 100 basis points higher than India’s weightage in the benchmark MSCI Asia ex-Japan index. China and South Korea are the two other markets which Nomura is overweight on, while it runs an underweight position on Singapore and Philippines.

“The structural story of India is now well known as a major beneficiary of the “China+1” theme, possessing a large, liquid equity market. We see recent softness driven by higher oil prices as an opportunity to raise exposure.

 While his weakness may persist in the near term, thus presenting even better timing, we think the window of opportunity might not be open for too long. Valuations are expensive but will likely remain so in a scenario of policy/government continuity,” said Nomura Equity Strategists Chetan Seth, Anshuman Agarwal and Ankit Yadav in a note.

Nomura says sustained high oil prices, China re-rotation and the General Elections in May 2024 are the key risks for the Indian markets, reported the Business Standard.

The 100-Bagger Stocks

Now, since there is bullishness in the air again, maybe a good time to look at stock stories too.

Before we do that, thanks to the Nomura report, at least in the eyes of some analysts, yesterday the markets were up, although slightly.

The BSE Sensex settled 173 points higher at 66,119 levels. The Nifty50 index, meanwhile, closed at 19,716, up 52 points. 

When markets are not going anywhere in any real sense, if only for a few days, it is a good time to look at some research and learn from the past.

]Today, I thought I would look at what stocks or what kind of stocks really deliver value. 

This is as much a comment on industries that have done well over time in India and survived a few business cycles, namely a few hard knocks and some periods of exuberance as of course the companies that make them up and their prices of course.

So even if you are not looking to pick stocks, this is a useful listing or approach to see where your own organisation likely fits, particularly from a strategic and management point of view, as I will come to shortly.

So ICICI Securities in an exhaustive report has concluded that traditional manufacturing and a few service companies form the bulk of the 100-baggers, sporting >25% CAGR stock price appreciation (ex-dividends) over a 20-year period.  

ICICI Securities says business models that flourish during economic upcycles and preserve value during downturns can be labelled as ‘through-the-cycle’ (TTC) compounders. 

And for this sample, there is a minimum 25% compounding over the past 20 years to qualify for the list of TTC 100-baggers. 

Most of the stocks that constitute this list hail from traditional manufacturing – commodities (chemicals, cement, etc.), building materials, home appliances, capital goods, engineering, discretionary consumption, staples, pharma, etc. A few TTC 100-baggers emanate from the services sector such as financials and rating agencies, says ICICI Sec.

Economic cycles and investor behaviour provide massive tailwinds or headwinds for stocks in the medium term; investors may get carried away

ICICI has outlined two cycles. The first cycle belonged to capital-intensive and cyclical stocks: Investors reaped the benefits of a booming investment and real estate cycle between 2003–2010. This resulted in a rapid expansion in gross fixed capital formation (GFCF), which in turn also boosted the credit cycle. 

Cycle-2 belonged to low earnings volatility and quality stocks: However, post-2010, capex, credit and real estate cycles started their respective journeys to decadal lows. In contrast, the NPA cycle had only begun rising, thereby denting the performance of companies that formed part of such sectors. 

Cycle 3 is again being driven by capital-intensive and cyclical stocks as investment cycle again starts to pick up after a decade. Also, going by the past empirical evidence, it is likely that the ‘richening of valuations’ for low earnings volatility stocks a.k.a. quality stocks seen in cycle 2 may mostly reverse going ahead, resulting in a dip in their P/E ratio. 

This process has already started with most quality stocks showing a dip in their lofty P/E ratios since FY21.

So the broad learnings for the 100 baggers, if you want to join the club at some point or be part of a company that is heading there.

Having a focussed business model: None of the stocks had a diversified business approach while there was a sharp focus on core business. This factor also speaks volumes about the quality of the management and the sharp focus they bring to the business strategy.

Focus on value creating growth: Earnings growth and RoE > ‘cost of equity’. This indicates prudent capital allocation decisions while the tailwinds of economic cycles propelled earnings growth.   

Business throws out more cash than it consumes: Cumulative ‘operating cash flow’ (OCF) exceeded cumulative capex over the past two decades for most of the stocks (excluding one-off acquisitions) and speaks about the quality of the business.

Avoid –

o   High financial leverage and reduction in financial leverage over time.

o   Regulated sectors: Almost all the stocks were from unregulated sectors except for liquor.

·        Competition is overstated: Competition is a key risk while evaluating a company, but obsessing over it may not be beneficial for an investor. Almost all the stocks belonged to sectors where there were multiple competitors.

ICICI also points out that fancy growth stories like the new age sectors during the 2000 dotcom bubble did not make it to the list.

And cheap valuations to start with, is obviously an important criterion. 


As rules and regulations go, the complexity, however simple it might be presented as, is increasing.

The government’s trade officials showed a demo of a new ‘import management system’ to IT hardware companies including Apple, Dell and HP – 

Starting November 1, companies have to register and disclose data related to their imports, countries from which they import electronics hardware like laptops and personal computers, and domestic sales value, the Indian Express has reported.

On Monday, officials from the Directorate General of Foreign Trade (DGFT) met representatives from IT hardware companies and industry associations representing them to show them the portal they developed for tracking imports of laptops and computers.

“The portal has fields for sharing data related to import quantities, local sales value, and import sources,” an executive at the meeting told this paper.

This of course comes on the back of a hurriedly and inexplicably sudden announcement that India would slap import licences on imports of laptops and tablets.

The objective being to force the big brands to manufacture and assemble locally.

Not surprisingly, industry and consumers pushed back and the Government had to delay the directive’s implementation till October 31.

Now there is a new import management system that I just referred to, which is a partial roll back at best from the original intent.

The larger idea appears to be to reduce the degree of import dependence on the laptop supply chain and to the extent some imports are unavoidable, to import from a trusted source, Business Standard has said.

Equally, there is a production linked incentive scheme running.

Very broadly, there are incentives to manufacture locally and disincentives to import. 

Calibrating the two needs some thinking through and of course time and it is a little unusual to say the least the manner that it has been sprung on industry and users alike.

The other concern is obviously that quotas and licences in any system which slow things down, however tech-savvy the system of entering data might be.

To understand how the domestic electronics industry was seeing this, remember they lobbied strongly for more local manufacture, I reached out to Sanjay Agarwal, President of the 56 year old Electronics Industry Association of India or Elcina and also managing director of Globe Capacitors. 

I began by asking him how he was seeing the current steps and whether this is what the local industry wanted?



Speaking of manufacturing, in a conversation For the Core Report Weekend Edition, Louis Vincent Gave, a Hong Kong based fund manager and researcher attempted to bust the myth that industry was fleeing China. According to him, while it was true that industries were moving, most of them were in lower value add areas. He even quoted the example of toys, an industry where India has virtually banned imports from China.

According to him, China is almost happy to let these industries go because it’s focus is on industries where it has higher value add and a strangle hold.

Like batteries.

A report in Bloomberg says that where China truly flexes its might, for example, in batteries, is in cell components — the four key parts that are essential for a battery to work.

It has about 70% of the world’s production capacity of cathodes (the part of the cell that receives electrons) and more than 80% of anodes (the part that releases electrons on discharge), and well over half of electrolyte and separator output. 

Those parts come together to make a lithium-ion battery, more than three quarters of which are made in China and mostly by just two firms — Contemporary Amperex Technology Co. Ltd. and BYD Co.

And then there are costs.

China’s battery packs come in at $127 per kilowatt hour on a volume-weighted average basis while prices in North America and Europe are 24% and 33% higher, according to BNEF.

Akasa Air Pilots

Two weeks ago, a lawyer representing Akasa Air, the 13-month airline said the quitting of some 42 pilots by the airline could see it shutting down. 

The lawyers were taking the pilots to court over breach of contract and abandoning their posts before serving their 6 month notice period.

The pilots were allegedly poached by or left for Air India Express, belonging to the Tatas now.

Now shutting down was statistically difficult since this was only 10% of the airline’s pilots that had decamped but the damage was done with media outlets headlining the lawyer’s statement suggesting the airline was shutting shop.

Which in turn prompted the management to issue statements urging calm and pointing out that except for some cancellations, all was well. 

Quite surprisingly, a senior pilot or two of the airline also came out and said their airline was in fine fettle and they, as pilots, were quite happy with the Akasa and were looking forward to the future with optimism, or such words.

Now back to the case.

The Delhi High Court on Wednesday held that aviation watchdog Directorate General of Civil Aviation (DGCA) can act against pilots who have not complied with civil aviation requirements (CAR). 

In a relief to Akasa Air, it further held that there are no restrictions on the DGCA to take action against pilots in case of default.

The aviation regulator had previously informed the Delhi HC that it lacks the authority to intervene in the employment agreements between pilots and airlines, in response to a plea by budget airline Akasa Air seeking action against those who left without serving their mandatory contractual notice period.

Meanwhile, Bombay High Court ruled that Akasa Air can proceed in Mumbai with its suit seeking contractual damages from pilots who had allegedly exited the company, without serving a notice period. Originally, Akasa Air had approached the High Court seeking compensation of Rs 21 crore from six pilots for allegedly leaving the carrier without a proper notice period.

While Akasa Air may or may not win this round, it is highly unlikely that any pilot can or will cough up this kind of money.

PIlots I spoke to said they quit and left precisely because they were getting better money elsewhere, a situation a little more acute after Covid left the aviation industry worldwide in the doldrums.

A settlement of some sort between the pilots and the airline is obviously called for. So that everyone can get back to work and business. The question is when?

Google is 25 years old

And before I go, did you know that Google has just celebrated its 25th birthday. Twenty-five years ago, Larry Page and Sergey Brin launched Google Search from a small garage in a California suburb. Where else, you might wonder or ask !

Today, Google says it has offices and data centres on six continents, in over 200 cities. 

Google’s purpose and mission is broadly the same from the day it launched. Its ambition in 1998 was to create a search engine that would help people make sense of the information they find online — and that’s still true today. 

And Google says it has of course become more than a search engine: Today it maps the world, brings AI into everyday tools and helps people gain skills in digital careers, among other things.

Of course there is so much more to say but it is interesting that founders of the Google, Meta or Facebook era seem to have, perhaps in perfect hindsight, set out to build enterprises that would not just endure despite all the rapid changes in the world of technology but they themselves would nurture and grow over the years, decades actually.

On that note, that’s it from me