How To Spot A 100-Bagger Stock By Raamdeo Agrawal

Raamdeo Agrawal, co-founder and joint managing director of Motilal Oswal Financial Services, on what it takes to identify a stock that will go up multifold

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One should not fall into the trap of compromising on the quality of growth. In 1960, Phil Fisher said that in investing, 90% is the management, 9% is the business and only 1% is other things that matter. If the management is strong and the business is good, nothing else matters. At one point, HDFC bank was available at Rs 700 crore-800 crore; today, it is a Rs 2.5-lakh-crore bank. At some point, valuations are less important, particularly when you are buying a small-sized company’s stock. I believe valuations are less important, particularly when buying shares of small-sized companies that tend to grow fast and accelerate earnings rapidly. For instance, if you missed buying Infosys at Rs 200 crore and later bought it at Rs 500 crore, it hasn’t made much of a difference in the context of the company’s current market capitalisation.

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