Some simple calculation on 26% CAGR to multiply the principal 10 times in 10 years.
D-Mart currently is growing at around 35-40% pa.
Trailing p./e is close to 117.
It will grow at an average of 25-30% pa for next 10 years. Say, 35-40% for first 3-4 years and then growth slowing down to 20-25-30% for next 5-6 years. (for sake of mental models)
Its ROE/ROCE is close to 18%/22% at the moment, while the growth is much higher. So at some point in time, they are going to raise capital to fuel this amazing growth. (Let's assume, it won;t need any, and it will improve its ROE/ROCE with time to 25-26%).
Page Industries (best example i can think of for such high p/e multiples with high growth), is trading at 55-60 p/e and is now growing close to 20-25%. Yes, a different segment, but we don';t have d-mart like businesses in India which we can compare with. People have compared it with Walmart obviously because of similar business model and amazing growth over long term. Noteworthy, suggested Walmart exit multiples is ~ 18 times.
Valuation vis a vis growth -
Now, if we apply 26% CAGR growth to say it will grow its EPS 10 times in 10 years, but p/e which is currently at 117, will reduce to 55-60 times trailing in 10 years; this means p/e will become half in 10 years, while EPS growth being 10 times. This means valuation will multiply by 5 times in next 10 years. Therefore, despite EPS growing 10 times, valuation will only grow by 5 times in 10 years. This gives valuation growth CAGR ~ 14-15% pa.
Now, in this mental model, i am assuming lots of things such as improvement in ROE/ROCE such that it will fund its growth through internal accruals, growth estimates, profitability not falling, p/e at 55-60 times after 10 years, no black swans. So, at this valuation, what one is going to get is a 14-15% CAGR return in next 10 years
I don't think it can remain at over 100 times trailing valuation for long. P/e would come down despite good growth. Hence despite being a very good business, it would remain an average stock at these valuations.