We discussed the top-10 multi-bagger stocks of the past decade in the first part of the Wealth Creators series, released last week. If you missed it, click
here to read it. In this part, we analyse the sectors and companies (by their size) that delivered the highest returns. Also, we will touch on the growth in revenues and profits and other aspects of the top-500 wealth creator stocks (WC-stocks).
What Worked
Sectors that benefited the most over the past decade (in terms of number of companies in the list of top sectors) were: wire-rope-cables sector, stockbroking, railways, defence and retail. Interestingly, there were no companies in our top-10 list of stocks from these five sectors. Also, companies from these five sectors form around 80% of stocks in our list of top-10 wealth creating sectors. Wire-rope-cables was the largest sectoral outperformer, with eight stocks, followed by stockbroking, with seven, and railways and defence sectors, with five stocks each. Thereafter, the number of stocks declined. Retail comprised just three stocks, while media and outsourcing sectors had two stocks each. The top-3 best performers in the wire-rope-cables sector were: Rajratan Global Wire, KEI Industries and Paramount Communications, with CATSR return of more than 40% each.
In terms of average compounded annual growth rate (CAGR) return of sectors, the top-3 performers were: media, trading & investment services and retail, with returns of 51.90%, 47.87% and 40.52%, respectively. Though the number of companies in these sectors, together, was six.
Top-10 Sectors Dominating the Wealth Creators
Wire-rope-cables Sector
The wire- ropes-cables sector has had strong tailwinds in the past few years, with huge demand from various industries as well as exports. Before 2021, the sector was down in the dumps but, in the past two-three years, the business has been robust leading to huge gains. The global wires & cables market, surpassing US$215.8bn (billion) in calendar year (CY) 2022, is projected to witness CAGR of 8.5%, reaching US$500.4bn in CY32. This growth is underpinned by increased infrastructure development, rising demand for consumer electronics and technological advancements in the communications industry.

In India, the wires & cables sector, which constitutes approximately 45% of the electrical equipment industry, is growing fast due infrastructure spending. The organised sector's rapid ascent, coupled with government emphasis on infrastructure investment, is poised to drive growth across various sectors like infrastructure, power, telecom, transmission & distribution (T&D), manufacturing, real estate, engineering and automotive.
One of the top players in the wire & cables business is KEI Industries. It has also diversified into engineering-procurement-construction (EPC) services for power and transmission projects. Its five manufacturing units are located in Bhiwadi, Chopanki and Pathredi (in Rajasthan) and Rakholi and Chinchpada (in Dadra and Nagar Haveli). Sales have compounded by 17% in the past 10 years and profit has compounded by 48% over the same period. This stock has delivered 30% return in the past one year and CATSR return of 54% over the past 10 years. The stock has multiplied by 134 times in the same period. The other companies in this sector include: Paramount Communications, Ram Ratna Wires, Precision Wires India, Delton Cables, Usha Martin and D&H India. They have delivered CATSR of 40%, 36%, 34%, 34%, 30%and 22%, respectively.
Stockbroking Sector
Although our data has thrown up two big winners in stockbroking and we cannot ignore the data, we will not dwell much on it because all the big gainers are marginal players. In the top-500 WC-stocks list, seven companies were from this sector. The broking business is projected to grow from US$54.38bn in 2025 to US$142.56bn by 2034, exhibiting a CAGR of 11.30% during the forecast period (2025 - 2034). Additionally, the size of stockbroking market was valued at US$48.86bn in 2024.

Broking business experienced minimal impact from the COVID-19 outbreak, with increased adoption of stock market trading solutions, amid unprecedented circumstances. The rise in new accounts led to a spurt in trading. The sector also embraced algorithmic trading which contributed to a massive rise in trading volumes. In India, the brokerage industry is undergoing a transition to a fee-based model, moving away from the traditional transaction-based approach. This shift has led brokers to offer new services, including investment and wealth management advisory, with a heightened focus on fund-based activities like margin funding. This evolution is enabling broker firms to generate sustainable earnings and expand their product and service offerings, enhancing client relationships.
The top performer from this was Prime Securities, with CATSR return of 47% over the past 10 years. The company gets around 51% of its revenue from merchant banking and advisory fees, 35% from restructuring advisory fees, 7% from interest income on deposits with banks, remaining from others. It recently acquired 41.68% stake in Ark Neo Financial Services Private Limited, the Chennai-based fin-tech platform known as ‘DhanLAP’ to diversify its portfolio. Recently, it expanded into the wealth management sector through its wholly-owned subsidiary, Prime Trigen Wealth Ltd (PTWL). Prime Securities' sales have increased by CAGR of 15% over the past three years whereas profits have witnessed CAGR of 31%. Its market-cap has multiplied by 69x over the past 10 years. Its current market-capitalisation is around Rs850 crore. The other top performing companies in this sector include: Indo Thai Securities (40%), Swastika Investmart (35%), Arihant Capital Markets (35%), Almondz Global Securities (28%), Quest Capital Markets (28%) and BN Rathi Securities (26%).
Railways Sector
The Indian railways sector is undergoing a transformative phase, playing a crucial role in India’s infrastructure development and economic growth. The Union Budget 2024-25 allocated a record Rs2.62 lakh crore to modernise the railway network, enhance operational efficiency and improve passenger services. Major projects like the Mumbai-Ahmedabad high-speed rail corridor and dedicated freight corridors aim to reduce travel time, lower logistics costs and boost freight efficiency, supporting the goal of reducing logistics costs to 8% of gross domestic product (GDP) by 2030.

The National Rail Plan outlines strategies for decongesting the network and meeting future demands. Sustainability is another key focus, with a target of 100% electrification by 2024 and integration of renewable energy (RE) to achieve net-zero carbon emissions by 2030. These initiatives, combined with public-private partnerships (PPP), position Indian Railways as a cornerstone of India’s journey toward becoming a US$5trn (trillion) economy by 2025, offering significant opportunities for stakeholders, while promoting a more connected and sustainable future.
Frontier Springs is the top performer in the railways sector, with CATSR return of 51% over the past 10 years, with current market-cap of around Rs890 crore. Its sales have witnessed CAGR of 14% over the past 10 years, while profit has grown by 22% in the same period.
Established in 1981, Frontier Springs Limited has positioned itself as a premier manufacturer in the railway sector, evolving alongside industry advancements. Initially focused on producing leaf springs and laminated bearing springs, the company is now renowned for manufacturing hot-coiled compression springs, air springs and forgings—critical components for wagons, carriages and locomotives. With two advanced manufacturing facilities in Kanpur (Uttar Pradesh) and Paonta Sahib (Himachal Pradesh), Frontier Springs has expanded its product portfolio to include forging items ranging from 100gm (grams) to 20kg (kilograms).
The springs division, a cornerstone of the business since 1991, specialises in robust, space-efficient and fatigue-resistant coil springs crafted from durable chrome molybdenum and chrome silicon steel rods. Meanwhile, the forging division, established in 2011, produces essential train parts like anti roll bar assemblies, screw couplings and gear assemblies, with ongoing upgrades set to enhance its heavy forgings capability by FY24-25. Recently, the company has ventured into manufacturing air spring suspension systems for coaches through a partnership with Contitech (Germany). The big gainers from the railway sector include: Jupiter Wagons (39%), Titagarh Railsystems (31%), Kernex Microsystems (India) (28%) and Oriental Rail Infrastructure (26%).
Defence Sector
The top performer in the defence sector was Avantel which delivered a CAGR return of 55% over the past 10 years. Its market-cap multiplied almost 92 times over this period. The company recently won orders of Rs8.6 crore from ministry of defence (navy), Rs44.5 crore from L&T, Rs3.5 crore from Bharat Electronics and Rs9.4 crore from NewSpace India.

Avantel, established in 1990 by Dr Abburi Vidyasagar, specialises in design, development and manufacturing of defence electronics products, with core competencies in wireless and satellite systems, RF system design, embedded systems, and network management. Avantel has demonstrated strong profitability, driven by its indigenously developed satellite communications products, achieving revenue of Rs223.92 crore in FY23-24 with robust margins of 37%. Supported by a sound financial structure, absence of term debt and advanced in-house research & development (R&D) facilities, Avantel is well-positioned as a leader in innovative defence solutions. The other top performers in this sector include: Zen Technologies (36%), HBL Engineering (30%), Premier Explosives (27%) and Bharat Electronics (25%).
Retail Sector
The top performer in retail sector was Trent, with CAGR return of 46% over the past 10 years. It was followed by Cantabil, with 39% CAGR return in the same period, and V2 Retail with 37% CAGR return. Trent, a part of the Tata Group (holding 37.01%), has established a strong presence across diverse segments, from value fashion to luxury products. It operates iconic brands like Westside (lifestyle retail) and Zudio (value fashion), managing a portfolio of 232 Westside and 545 Zudio stores, as of 31 March 2024. As of Q2FY24-25, Zudio has store count of 577 in 184 cities and Westside has 226 stores in 81 cities. It also collaborates with global leaders such as Inditex for Zara and Massimo Dutti and Tesco PLC for grocery retailing under the Star Stores brand. With a footprint of 831 stores spanning 184 cities, Trent’s retail network is one of the largest in India.

In FY23-24, Trent achieved a remarkable 50% year-on-year (y-o-y) growth in total operating income, reaching Rs12,360 crore, driven by a combination of new store additions, a 10% like-for-like (LFL) growth and increased retail space. Key revenue contributors include Westside and Zudio, which saw significant store expansions, and Zara, which reported an 8.5% y-o-y growth. Additionally, Star Stores generated Rs2,189 crore in revenue, with 66 outlets. The company’s sales per square foot (sqft) improved notably to Rs15,776 in FY23-24 from Rs12,805 in FY22-23. Online sales through platforms like Tata CliQ and Westside.com contributed to its diversified revenue streams. Trent’s sales have witnessed CAGR of 18% over the past 10 years and profits of 59%. Its valuation has multiplied by 56x in the past 10 years.
How Big Did They Get
When a stock becomes a multi-bagger, its market-cap expands a lot, allowing it to move up the size-ladder. In this section, we will find out the size of WC-stocks that expanded the most in 10 years. This will show where our focus should be, in terms of market-cap, if we aim to find multi-baggers. For simplification, we classify stocks into five sizes—micro-cap, small-cap, mid-cap, large-cap and mega-cap. Micro-cap stocks are those that had market-capitalisation (m-cap) below Rs100 crore, small-cap between Rs100 crore and Rs500 crore, mid-cap between Rs500 crore and Rs2,000 crore, large-cap between Rs2,000 crore and Rs10,000 crore and mega-cap more than Rs10,000 crore, as in November 2014. We may revise this classification soon.
In the table below, column (a) contains the size of companies (b) contains the distribution of the 500 wealth creators at the start of our study, i.e., November 2014 and (c) tells us the average CATSR achieved by the size-category. The remaining columns show mobility of the initially distributed sizes of companies, over the next decade, i.e., up to November 2024.
Market-cap Change in 10 Years of Wealth Creators
Micro-cap: These reported the highest growth with an average return of 32% compared to 34% last year. Micro-caps have not only bounced to become small-cap (one level up), but also entered the arena of mid-caps (two levels up) and large-caps (three levels). Around 71 micro-caps turned into mid-caps and eight outshone others to become large-caps. Around 126 micro-caps, out of 211, entered the small-cap space in the past decade but six companies remained micro-caps, stagnating where they were earlier. Their growth has de-accelerated from last year, when 149 stocks turned small-cap and five remained in the micro-cap space. This may be attributed to the huge rally in low market-cap companies.
Sectorally, the highest number of movers from micro-cap to mid-cap was from chemicals (7), engineering - electronics – electricals (7) and software & IT services (5). The highest number of movers from micro-cap to small–cap, sector–wise, was from engineering-electronics–electricals (15), pharma (11) and chemicals (10). One each moved from micro-cap to large-cap from eight sectors. The biggest compounders among these movers from micro-cap were: Refex Industries (68%), Sadhana Nitro Chem (63%) and Tanfac Industries (62%).
Small-cap: There were 183 stocks that were small-cap 10 years ago; out of them, six were the big outperformers and entered into mega-caps. Of these, 70 became large-cap and 97 became mid-cap, whereas 10 remained in their category only. The performance of small-cap has declined from the past year when just 86 became large-caps and just three remained small-cap after 10 years.
Sectors of stocks which entered mega-cap were: steel products (2), auto-components, wire-rope-cable, speciality chemicals and steel. The top sectors where stocks moved from small-cap to large-caps were: engineering-electronics–electricals (10), steel products (6), construction and infrastructure (6), speciality chemicals (4) and software & IT services (4). Lloyds Metals & Energy, KEI Industries, Jai Balaji Industries were the top performers, with CATSR of 67%, 54% and 52%, respectively.
Mid-cap: Out of 72 mid-cap stocks a decade back, 41 turned large-caps and the remaining 30 leapt into mega-caps. One remained in the mid-cap. Most of the companies that entered mega-cap were from industrial intermediates (4), lifestyle & leisure (2), software & IT services (2), auto-components (2), real estate (2), chemicals (2), farm and farm inputs (2). Trent, Patanjali Foods, Escorts Kubota, The Fertilisers and Chemicals Travancore were the top performers, with CATSR of 46%, 45%, 40% and 40%, respectively.
Large-cap and Mega-cap: In the previous year, we had just 16 stocks that were either large- cap or mega-cap (10 years back); this year, this number has jumped to 34. Companies that gained the most in this category were: Bajaj Finance, Adani Enterprises, Adani Power and Cholamandalam Investment and Finance Company. In terms of number of stocks sectorally, financial services (4), real estate (4), engineering-electronic-electricals (4) were the top performers.
Given the past track record of micro- and small-cap stocks, this data should not surprise investors. An understanding of the structural ingredients that drove stock prices can help us identify broader trends of a wealth-creating portfolio. Can factors that make a multi-bagger stock be applicable to an entire sector? If that were true, the top-10 WC-stocks would share more similarities with each other. However, that is not the case. While sectoral tailwinds are present, not every company/management in the same sector is able to benefit from them. Growth, at the broader level, is dependent on different factors and one of them is sales growth. The sales of a company, even start-ups that rarely turn profitable during their growth phase, tell us whether the product or service offered is actually useful. A continuous increase in sales, among other factors, indicates a potential for positive future growth which is eventually recognised and rewarded by the market.
Revenues and Net Profits of the Top-500 WC-stocks
What was the movement of sales in top-500 WC-stocks in the past decade? On a consolidated basis, revenue growth of the top-500 companies was flat for the first three years (grew by just 3% up to September 2017) and then grew by a moderate 22% in the next three years; thereafter, sales growth was just exceptional—between 20% and 25%—for the next two years (Sept-20 and Sept-21 y-o-y). For the following year, sales growth performed even better at 39% y-o-y. But, in the next two years, sales growth declined to single digits at 6.9% to 8.3%.
The top-500 WC-stocks have increased their top-line at a CAGR of almost 9.5%pa (per annum) in the past 10 years. The total revenue reported by the top-500 stocks was Rs29.16 lakh multiplied around 3x, since the September 2020 figure of Rs9.86 lakh crore, when it had nosedived due to the recession.
What about net profits? In the graph below, you can see net profit growth of top-500 WC-stocks in our list. Unlike the somewhat stable revenue growth rate seen in the graph above, the net profits of these stocks moved in fits and starts. However, net profits doubled quicker than, and before, revenues could catch up. This could be due to operational efficiency and optimal use of debt to get higher profits without the need of higher sales. But net profit growth has slowed considerably in the past one year compared to the huge growth of 76.6% seen in Sept-21.
The CAGR in net profit of the top-500 wealth creators was 17.4%; this is significantly lower than 27%pa growth seen in the last year’s top-500 stock lists, but it is much higher than revenue growth of 9.5% in the same period. Net profits faced their worst decline in 2020 when COVID-19 wiped out profits of many firms. Profits have multiplied almost five times in the past decade. Notably, in the past three years, the y-o-y profit growth has declined from 14.3% in Sept-2022 and 14.05% in Sept-2023 to just 6.6% in Sept-2024. This is seen in the chart below.
Dividend Yield
The two main components, which define shareholders’ return, are price appreciation and dividends. When the stock price appreciates more than the dividends paid, the latter seems negligible. But dividends play an important role in the calculation of total shareholder returns (TSR). There are many stocks whose dividends constitute a significant portion of the total returns.
A few software companies (Oracle Financial Services, Infosys and Mastek) were among the top dividend payers. Veedol Corporation (auto-components), Tide Water Oil Company (auto-components), Sanofi (pharma), Page Industries (garments), Nestlé (foods & beverages), Bosch (auto-components), Procter & Gamble (consumer products) and Abbot India (pharma) also paid handsome dividends over the past 10 years.
While stocks fluctuate on a day-to-day basis, real wealth is created in the market when you hold shares of a good company for the long term. We saw mainly chemicals, engineering, specialty chemicals and manufacturing businesses as top wealth creators in the past decade. Most of these companies were small stocks a decade ago. Who would have identified them? It is hard to spot such companies simply because their story unfolds gradually over many years. One thing is certain. If you want multi-baggers, you are unlikely to find them among the ranks of larger companies. You will have to rummage the small-cap and micro-cap space. Of course, the universe of listed micro- and small-cap stocks is large. There are over 1,500 stocks with a market-cap of between Rs10 crore and Rs100 crore. It would require luck as well temperament to find the next Trent and to spot them when they fall very sharply, periodically. A study of past winners such as this one, may prepare you for it.