Domestic benchmark equity indices, the Sensex and the Nifty 50 ended Friday’s session flat dragged by selling in selling in information technology (IT), metal, oil and gas stocks and bank. The Sensex ended flat by 15.44 points lower at 73,142.80 level, while the Nifty 50 closed at 22,212.70 level, down 4.75 points in Friday’s trading session.
Listed below is a small-cap stock that has delivered multibagger returns of 62,000 percent to its stakeholders in 9 years:
With a market capitalization of Rs. 7,258 crores, the shares of Magellanic Cloud Ltd started Friday’s trading session on a lower note at Rs. 612.55 compared to its previous close of Rs. 618. During the trading session, the shares hit a high of Rs. 623, gaining around 1 percent and closed the day at Rs. 621 apiece.
In January 2015, the stock price was trading at Rs 1 exhibiting a gain of around 62,000 percent compared to the current price. For example, if someone had invested Rs. 1 lakh into the company’s stock 9 years ago, it would have converted to approx Rs 7.22 crores now.
Looking at the company’s financial statements, the revenue decreased by around 15 percent from Rs. 154 crores during the September quarter to Rs. 131 crores during the December quarter. On a contrasting note, the net profit increased by 5 percent from Rs. 22 crores to Rs. 23 crores during the same timeframe.
Comparing these metrics on a YoY basis, the revenue decreased marginally by 1.5 percent from Rs. 12333 crores during Q3FY23 to Rs. 131 crores in Q3FY24. On the other hand, the net profits zoomed by 35 from Rs. 17 crores to Rs. 23 crores during the same period.
Furthermore, the company has accomplished a significant milestone with its subsidiary company, Scandrone Ltd, by completing the research and development of Agri and Cargo drones, which are designed and modelled with a range from 5 kg to 80 kg and even have participated in various trials. And also anticipates an increase in orders for its commercial drones in the coming quarters.
Moreover, Scandron Private Limited became India’s first company to receive a DGCA-Type Certification for a ‘Logistics Drone’, the Cargo Max 500HE and has also entered into a strategic partnership with ‘CriticaLog India’ to offer comprehensive B2B as well as hub-to-hub drone delivery solutions across 160 cities in India. This enables the company to operationalize and introduce innovative drone-based logistics solutions to the market.
The company has set an ambitious goal to increase its revenue target for FY24 by approximately 25 percent as compared to FY23. In addition, they plan to acquire 2 to 3 companies annually and are seeking opportunities in IT, e-surveillance, and drones, with a potential entry into the Middle East and US geographies.
Coming onto the important financial ratios, the return on equity decreased from 45.10 percent during FY21-22 to 39.62 percent during FY22-23 and the return on capital employed zoomed from 22.61 percent to 30.95 percent during the same period. Further, the net profit margin magnified from 11.66 percent during FY21-22 to 17.33 percent in FY22-23.
Headquartered in Hyderabad, Magellanic Cloud was incorporated in 1981. The company is primarily within the digital space, specializing in providing comprehensive solutions related to digital transformation, IT services, cloud computing, and advanced drone technology.
Their portfolio includes expertise in areas such as product engineering, product development, quality assurance, DevOps, data analytics, multi-cloud management, drone solutions, e-security and surveillance, enterprise security, and human capital solutions.
Written By Vaibhav Patil
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