Shares of this undervalued stock under the ‘micro-cap’ category have proven to deliver multibagger returns of around 2,000 percent within a period of just six months.
Prime Industries Limited (PIL) is engaged in the business of manufacturing as well as the marketing of ‘Vanaspati’. The company also started manufacturing bakery-quality Vanaspati that is well-accepted in the market. The operations include processing various oils like sunflower oil, etc for the purpose of producing superior-quality refined oil.
With a market capitalization of Rs 230 crores, the company’s shares closed at an all-time high price of Rs 146.40 on Friday. The price-to-earnings (P/E) ratio of the company is reported at 17.83, way lesser than the industry P/E ratio of 22.
According to the data available from the Bombay Stock Exchange (BSE), the company’s stock has given multibagger returns of approximately 2,000 percent over a period of just six months ranging from Rs 7 in March 2023 to the current stock price levels.
The same means that if someone had invested Rs 10 thousand into the stock, it would have converted to around Rs 2.10 lakhs within the period mentioned above.
The latest quarterly financial reports of the company portray an increase in the basic business parameters such as the operating revenue and net profits.
The operating revenue went up from Rs 5.53 crores during Q4FY22-23 to Rs 11.43 crores during Q1FY23-24, and, the net profits, keeping the timeframe the same, showed a drastic change from Rs 82 lakhs to Rs 11.20 crores.
Additionally, the company reported healthy profitability ratios during FY22-23 with the return on equity (RoE) standing at 7.63 percent and the return on capital employed (RoCE) reported at 6.63 percent.
The debt-to-equity ratio of the company, already below the desired levels, has reduced even more showing a positive change from 0.48 times within FY21-22 to 0.13 times during FY22-23.
The latest shareholding data available for the June 2023 quarter represents the promoter’s ‘skin in the game’ by holding a 56.38 percent stake followed by the retail investors holding a 43.59 percent stake in the company.
Written by Amit Madnani
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