Consistent compounders! These 7 stocks have done what others failed to do in last 5 years

Equities never give guaranteed returns. But seven stocks on the bourses are doing their job smartly, delivering double-digit returns year after year since 2015 despite talks of slowdown, geopolitical tensions and demonetisation amid sustained selling in midcaps and smallcaps.

In alphabetical order, chemical players Aarti Industries and Atul top the list.

Aarti Industries, a leading manufacturer of chemicals and pharmaceutical intermediates with global footprints, saw 107 per cent jump in 2015, 31 per cent in 2016, 66 per cent in 2017, 27 per cent in 2018 and 13 per cent in 2019 (till September 25), respectively. Axis Securities says the company is well positioned in the global market with a marquee customer base, robust margins, strong balance sheet and a diversified product portfolio. With the company expanding product portfolio and existing capacities and a shift in demand from China, the company is likely to see steady earnings growth for a long term. Shares of the company turned ex-bonus in the 1:1 ratio on September 27.


Atul gave between 15 per cent and 35 per cent returns year after year during this period. It manufactures value-added chemicals by blending basic chemicals and natural resources for diverse industries – from agriculture, construction, textiles, pharmaceuticals to automobiles – from its plants in Valsad, Bharuch (Gujarat) and Thane (Maharashtra). Brokerage CD Equisearch recently revised the target price for Atul to Rs 4,663 from Rs 4,169 earlier.

“Though it has no small base, earnings growth would barely show signs of waning, boosted largely by the recent corporate tax cut. With an improved outlook, we revise post-tax earnings target upwards for this financial year by 26 per cent,” CD Equisearch said in a report.

In the financial space, Bajaj Finance, Bajaj Finserv and HDFC Bank managed to get their places on the list. Bajaj Finance rallied 73 per cent in 2015, 40 per cent in 2016, 109 per cent in 2017, 50 per cent in 2018 and 49 per cent in 2019. Bajaj Finance rallied 554 per cent in these five years, while Bajaj Finserv and HDFC Bank gained 315 per cent and 129 per cent, respectively, during the same period.

Emkay Global Financial Services has a ‘buy’ rating on Bajaj Finance with a 12-month price target of Rs 4,550. With the forthcoming festive season and several planned online and offline mega sales events lined up, the brokerage reiterates that Bajaj Finance remains the best bet to play the India consumption story.

Goldman Sachs has maintained ‘buy’ rating on HDFC Bank with a 12-month price target of Rs 1,389. The stock jumped 14 per cent in 2015, 11 per cent in 2016, 56 per cent in 2017, 13 per cent in 2018 and 17 per cent in 2019.

“We remain confident that HDFC Bank will deliver above-consensus earnings growth at CAGR of 22 per cent over FY19-24E and RoA of 2 per cent by FY24E (notwithstanding the recent tax cuts), helping the market-cap to double to $200 billion from $100 billion at present,” it said.

Shares of auto ancillary player Maharashtra Scooters and entertainment major PVR have delivered over 10 per cent returns to investors every year since 2015.

Prabhudas Lilladher recently initiated coverage of PVR with an ‘accumulate’ rating and set the price target at Rs 2,099. It is the largest player in the multiplex industry with a screen market share of around 28 per cent.

“Except for east, PVR is the market leader in three out of four regions. PVR’s market leadership would remain intact. We value the multiplex player at an EV/Ebitda of multiple of 10 times. This is broadly in line with the past one year’s forward multiple of 11.6 times since FY10 and is justified given PVR’s market leadership, preferred brand positioning, strong organic screen pipeline and industry-leading metrics,” Prabhudas Lilladher said in a report.