Multibagger stocks are those that give at least 100% returns in a given time frame. Quite often, the shares of companies take a while to deliver multibagger returns to their shareholders. This could be a year or more. However, some companies deliver multibagger returns in a very short span of time.
Baroda Rayon Corp Ltd. is one such company that has delivered multibagger returns of 176.84% in the past month. In fact, the shares are locked at a 5% upper circuit at ₹ 124.30 apiece. The share price of the company increased from ₹ 44.90 apiece to ₹ 124.30. If an investor had invested ₹ 1 lakh in the company’s shares a month ago, the value of their holdings would have been ₹ 2.76 lakhs today!
The company’s shares have been hitting the upper circuit since June 01, 2022. At that time they were trading at ₹ 4.50 apiece. When we consider the returns from that point, the stock has given multibagger returns of 2578.88%. If an investor had invested ₹ 1 lakh in the company’s shares at that point, the value of their holdings would have been a whopping ₹ 26.78 lakhs today!
The company manufactures nylon and rayon. Its products include viscose filament yarn, carbon disulphite (CS2) plant, sulphuric acid, nylon yarn, polyester yarn, and nylon tyre cords. The company was founded in 1958 and is headquartered in Mumbai, India.
Baroda Rayon Corp Ltd. is a small-cap company with a market capitalization of ₹ 284.79 crores. It ceased all of its operational activities in August 2008. However, in the March quarter of 2022, the management restructured its business. They have strategically planned to utilize the idle assets of the company in a profitable way by starting a real estate business. This might be a reason why the share price of the company is escalating.
The company’s land amounting to ₹ 38,51,52,000 as per the balance sheet is transferred to stock in trade at a realizable value of 3,71,37,69,192. Therefore the difference of ₹ 3,32,86,17,192 has been credited to the increase/ decrease in earnings as per accounting standards.
Investors have to be careful before they decide to invest in companies. The share price of certain companies tends to be volatile. They should do a complete financial analysis of these companies before investing in them.
Written by Simran Bafna
The content in this news article is not investment advice. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Dailyraven Technologies or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
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