Patience is crucial when investing in potential multibagger stocks. (Unsplash/Representative Image)

Multibagger stocks are shares that give returns many times higher than their original purchase price. For example, if a stock you bought for Rs 100 rises to Rs 300, it’s called a three-bagger. If it grows ten times, it becomes a ten-bagger.

These stocks are usually undervalued in the market but belong to companies with strong fundamentals, good growth potential, and solid business models.

Multibaggers often come from companies with strong leadership, scalable operations, and good corporate governance. They may take time to show results but can offer massive gains in the long run if chosen wisely.

Low Debt

A company with a manageable debt level is more financially stable. While acceptable debt varies across industries, it’s often considered safe if debt is less than 30 per cent of the company’s equity.

Look at the company’s earnings over the past few quarters. If it is consistently growing at the operational level but is still undervalued in the market, it might be a hidden gem.