The Sensex and Nifty had their strongest week of 2024, surging over 2 percent on June 7 as government formation drew nearer. The NSE Nifty 50 gained 468.75 points or 2.05 percent to finish the day’s trading at 23,290.15, while the BSE Sensex reached an all-time high at 76,795 in Friday’s trading session and closed the day at 76,693.36.
Listed below is a smallcap stock that has delivered multibagger returns of 3,223 percent to its stakeholders in 4 years:
RIR Power Electronics Ltd
With a market capitalization of Rs. 1,148 crores, the shares of RIR Power Electronics Ltd started Friday’s trading session on a lower note at Rs. 1,600 compared to its previous close of Rs. 1,616.70. During the trading session, the shares hit a high of Rs. 1,650, gaining around 2 percent and closed the day at Rs. 1,643 apiece.
In June 2020, the stock price was trading at Rs. 50 exhibiting a gain of around 3,223 percent compared to the current price. For example, if someone had invested Rs. 1 lakh into the company’s stock four years ago, it would have converted to approximately Rs. 33.23 lakhs now.
Looking at the company’s financial statements, the revenue increased by 47 percent from Rs. 14.71 crores during the December quarter to Rs. 21.57 crores in the March quarter. In addition, the net profits magnified by 148 percent from Rs. 1.12 crores to Rs. 2.78 crores during the same period.
Comparing the same metrics on a YoY basis, the revenue jumped by 33 percent from Rs. 16.26 crores during Q4FY23 to Rs. 21.57 crores in Q4FY24. On the other hand, the net profits surged by 132 percent from Rs. 1.2 crores to Rs. 2.78 crores during the same timeframe.
The company has a manufacturing facility located in Halol, Gujarat, India. The facility is spread over a total built-up area of 40,000 square feet and includes die fabrication, soldering, encapsulation, and testing capabilities.
Furthermore, the company is setting up a Rs. 6,186 million Silicon Carbide (SiC) plant in Odisha, a first of its kind in India, through the help of central government incentive schemes and also state of Odisha incentives.
Silicon Carbide (SiC) is a growing alternative to silicon-based electronics components, especially in wide band gap applications. The material offers a unique combination of greater power efficiency, smaller size, lighter weight and lower overall cost of the systems.
This plant will create an ecosystem by leveraging vertical integration, securing the supply chain and significantly reducing the dependency on imports of SiC components in India.
RIR Power Electronics Ltd manufactures and sells various power semiconductor devices, including phase control thyristors, standard recovery diodes, fast recovery diodes, power modules, bridge rectifiers, and water-cooled assemblies.
These products are used in a wide range of industries, such as power electronics, which is a crucial component in various applications like power generation, transmission, and distribution, as well as in consumer electronics, automotive systems, and industrial automation.
In terms of key financial metrics, the company reported a Return on Equity (RoE) of 11.18 percent and a return on capital employed (RoCE) of 12.52 percent for the period spanning FY23-24. Furthermore, the net profit margin during FY23-24 was at 10.52 percent.
Written By Vaibhav Patil
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