Is Big-B, Amitabh Bachchan, the new Big-Bagger of stock markets?

Multibagger is a term used in stock markets for shares which have given multi fold returns in a time frame. Although the time frame and returns are not defined, generally any stock giving at least double the return is multibagger. So a double return stock is called 2-bagger and ten times return stock is called 10-bagger.

Stock markets have always been considered as a place with exclusive entrants. Celebrities have always looked upon as underdogs in terms of financial understanding. But Big-B, Amitabh Bachchan, has turned out to be a superstar in dalal street as well.

The big daddy of Bollywood has turned out to be the Big-Bagger finder of the markets. His investment in Stampede Capital attracted criticism and he was trolled as being fooled. But the stock gave 5 times return (5 Bagger) in less than a year silencing his critics. In addition, his investment-promotion deal with Just Dial also gave fruitful results.

Recently he bought Nitin Fire which is rather less on analysts radar and since then the stock has already grown around 18% (just 2 days) . It looks like the stock is gearing up for unseen frontiers and hence can turn to be a multibagger eventually (Caution:-Stock markets never give a guarantee though).

Let us analyse if this is worth or not. Nitin Fire is one of the leaders in the industry. Promoter holding in the company is a whooping 71.89 %. This is the kind of faith promoters have in the company. India is working to improve its safety culture and many an apartments and industries have safety systems. The company has a strong client base including some of the top industrial houses. In addition, Middle East countries (Gulf countries) contribute to a considerable chunk of the top line of the company.

The  net sales in December 2014, March 2015 and June 2015 have been 94.01 cr, 112.07 cr and 134.21 cr respectively. This shows that the company is getting orders and the momentum of orders is good. The company has been consistently making profit for the past few quarters and there have been research reports on the company in the last year some of which have given it a target of up to Rs.100. An added advantage to invest in this company is that it has been consistently giving dividends over past few years.

But there are concerns to be addressed as well. The company is having a debt of Rs 255.57 cr and its Price to the Earnings (P/E) is 105 which is too much.

Looks like Amitabh Bachchan is ready to give the stock market analysts a run for their money!