He Found 45+ Multibagger Stocks! Here's How He Finds Them Early | Kushal Lodha #392

Summary

Investor Amitabh Vatsya described a research-led approach to finding small- and micro-cap multibaggers. Rather than starting with a stock screener or focusing mainly on low P/E ratios, he looks for businesses with hard-to-replicate products, evidence of customer demand, capable management, and a plausible path from proof of concept to wider commercial adoption.

The host cited Vatsya as having identified more than 45 multibaggers and achieved roughly 100% XIRR from 2020 to 2024—equivalent to doubling money annually. These are claims presented in the interview, not independently verified in the subtitles.

Investing framework

• Follow themes and business developments. Vatsya said he reads Business Standard daily and tracks sector developments, but does not invest in a theme merely because it is popular.
• Investigate the business through its ecosystem. Speak with customers and suppliers to check whether the company is a real, valued participant in its industry. Credit terms or other support from a major customer may indicate trust, even if they do not prove the company has a strong moat.
• Look for a defensible product or capability. He favors businesses doing something difficult to replicate, such as specialized components, proprietary technology, or products supported by meaningful customer relationships.
• Distinguish capability from capacity. New factories or higher capacity do not automatically mean a stronger business. Assess whether the company has the people, processes, and execution ability to operate and sell that capacity profitably.
• Assess the balance sheet and funding runway. A healthy balance sheet can provide resilience, especially while a new product is being developed. For early-stage opportunities, he wants evidence that the company can survive the investment period.
• Understand the product’s stage. A product in development or proof of concept may have low or compressed earnings because of R&D, capex, and validation costs. He looks for evidence that the product works and can move into repeatable production and broader adoption.
• Evaluate R&D by its output, not just its ratio to sales. A high R&D-to-sales percentage is not enough; investors should determine what is being developed and whether it can create a valuable proprietary asset.
• Use valuation in context. He is willing to consider high-P/E shares when current earnings understate a developing business, but says investors still need to justify the opportunity and consider survivability. He also uses price-to-book selectively, particularly for asset-intensive or cyclical businesses.
• Avoid mechanical portfolio rules. He said he regretted repeatedly trimming a strong winner simply because it exceeded a preset portfolio weight. He prefers reassessing fundamentals and valuation rather than automatically capping a winner’s allocation.
• Build conviction through primary research. Plant visits and conversations with shop-floor staff can reveal execution capabilities that may not be apparent from financial statements. When speaking with management, he suggested asking which companies they admire and why.

Company examples and figures discussed

• Shivalik Bimetal Controls: The guest described its bimetal strips and current-sensing shunts as specialized products, with only a small number of global competitors. He said the business had exposure to the emerging electric-vehicle theme before it became widely recognized. The discussion also highlighted a move from selling components toward supplying more complete subassemblies or systems.
  • The subtitles include a claim of 33× returns and price references of ₹34 and ₹120 from 2019, but those figures do not reconcile mathematically. The return claim should therefore be treated as an auto-caption inconsistency.
• Zen Technologies: Vatsya described the company’s simulator and anti-drone work as examples of R&D potentially creating proprietary products. He said that in one period revenue was about ₹60 crore and R&D spending about ₹15 crore—around 25% of revenue—and estimated that roughly ₹40 crore of net cash was needed to withstand losses. He said he invested when the stock traded at about 239× P/E, arguing that earnings did not yet reflect the developing anti-drone business. He cited revenue later reaching roughly ₹800–1,000 crore and referred to a much larger future revenue ambition; the exact forecast and timeline are garbled in the subtitles.
• PTC Industries: Presented as a case of long-term investment in titanium-related capabilities for defence and aerospace applications. Vatsya said the stock traded at roughly 300× P/E when he invested and later at around 300–400×. His thesis centered on a scarce domestic capability and long product-development timelines, rather than near-term earnings.
• Yash High Voltage: The guest said he bought shares around ₹150–₹160 and described the stock as having risen to about ₹1,000, or approximately 6–7×, over roughly one to one-and-a-half years. He cited 96% repeat customers, technology acquired from a Swiss company and subsequently manufactured in India, and a niche position in transformer bushings.
• Krishca: The discussion used customer relationships as evidence of ecosystem support. Vatsya said JSW Steel offered the company roughly 15 days to pay for steel supplies, which he viewed as a positive signal of trust—not a large credit facility in itself. The subtitles also mention Hyundai, but the company and customer details are unclear.
• Adani Enterprises: Vatsya said he began investing around ₹170, initially allocated about 5% of his portfolio, and repeatedly trimmed when the position grew toward 10%. He later regretted trimming mechanically, saying he believed the company was meeting or exceeding targets described in earlier chairman’s letters. He said the investment ultimately became about 10× for him; the subtitles also mention a possible further move, but its timing and realization are unclear.
• Borosil Renewables: He said he entered around ₹300 and sold around ₹800. He later questioned whether the company had the technological moat he had initially assumed, despite a price-to-book multiple reportedly reaching approximately 12–14×.
• Cupid Ltd.: Vatsya said he researched the company but did not invest because of concerns about the promoter and lack of expansion. He later viewed a management change as the key trigger he had failed to follow. The subtitles describe the stock as gaining roughly 10× in the year after that change, following a long period of weak performance.
• Cosmic CRF: Vatsya said he invested around ₹238; the subtitles then cite prices around ₹265–₹300. He investigated a contingent-liability disclosure and the company’s position as a supplier to railway businesses, including Titagarh Rail, before considering a larger allocation. He also discussed possible bargaining-power and margin changes after competitor Pennar Industries withdrew from part of the market; the subtitles do not establish the final investment outcome.
• Hitachi Energy India: Vatsya favored Hitachi over Siemens and GE Vernova, citing its position in high-voltage direct-current (HVDC) transmission, perceived financial advantages, and access to financing through Japanese banking relationships. He noted that Hitachi Energy had grown from a much smaller company to a market capitalization of over ₹1 lakh crore; the exact timing and figures are not consistently captured.
• Velan: Mentioned as an oil-and-gas holding bought around ₹600 at approximately 14–15× P/E in 2024. Vatsya described its product replication and geographic expansion as part of his thesis, but the company-specific details are unclear in the subtitles.
• Synergy Green: Used to illustrate the need to distinguish stated capacity expansion from proven execution capability. Vatsya said he initially held back on allocating more until he had greater confidence in management and its communication with investors.

Risks and cautions highlighted

• Large new orders can strain small EPC contractors: working-capital needs may rise faster than available financing or management capability. Vatsya said he would scrutinize a company doing roughly ₹100 crore of business that suddenly received a ₹500 crore order.
• High order books, rising capacity, and high margins are not automatically positive; execution, funding, and customer sustainability matter.
• R&D expenditure as a percentage of revenue can be misleading if it does not produce commercially useful products.
• Horizontal acquisitions and rapid expansion outside a company’s core strengths can increase risk.
• He cautioned against highly promotional or domineering management, repeated CEO changes, and weak delegation.
• His examples show that high-P/E investing depends on judgment about future products and cash runway; a high multiple alone is not a buy signal.

Portfolio and other investing references

Vatsya said he held roughly 50 stocks across two styles: a “Multibagger Project” approach and an “Alpha Accelerator” approach, with holdings moving between them or being exited as circumstances changed. He also discussed a prospective PMS and described using media and technology as leverage to build his research business.

Books recommended included The Intelligent Investor, Security Analysis, and Philip Fisher’s Common Stocks and Uncommon Profits.

Assets, sectors, and instruments mentioned

• Stocks and companies: Shivalik Bimetal Controls, Zen Technologies, PTC Industries, Yash High Voltage, Krishca, Adani Enterprises, Borosil Renewables, Cupid Ltd., Cosmic CRF, Hitachi Energy India, Siemens, GE Vernova, Velan, Synergy Green, Pennar Industries, Titagarh Rail, ABB, Panasonic, ICICI Bank, and SBI.
• Sectors and themes: Electric vehicles, defence technology and anti-drone systems, titanium, aerospace, power transmission/HVDC, transformers and bushings, railways, EPC, oil and gas, solar glass/renewables, pharmaceuticals/CDMO, industrial components, and wind power.
• Instruments mentioned in the app advertisement: Stocks, mutual funds, ETFs, IPOs, bonds, and commodities. No specific ticker symbols were clearly stated.

Disclosures

The closing disclaimer says:

“Investment in Securities Market Subject to market risk. Read all the Related Documents Carefully Before Investing.”

The video also contains a brokerage-app promotion. No explicit “not financial advice” statement is captured.

Presenters and sources: Host Kushal Lodha; guest Amitabh Vatsya, associated with the YouTube channel Sadhan. The interview also refers to Business Standard, Economic Times, and investing ideas from Peter Lynch, Philip Fisher, and Warren Buffett.