The shares of SEL Manufacturing Company Ltd. gave multibagger returns of 39815.15% in less than one year as its share price surged from ₹ 4.95 to ₹ 1975.80 apiece on the NSE. However, the stock has been hitting a 2% lower circuit for 24 sessions.
Further, it was observed that the 52-week high of the scrip on the BSE is ₹1237.85, whereas it is ₹ 1975.80 on the NSE, which is a huge difference.
When a stock hits the lower circuit, it cannot fall further. However, one can buy at the lower circuit since there will be plenty of sellers available but readers and traders are advised to not take new entries in such stocks. Many times, shares hit the lower circuit when there is adverse news flow.
The Securities and Exchange Board of India sets or revises these filters based on market volatility or any unusual activity on certain counters.
SEL Manufacturing Company has very low trading volumes of 500 to 600 and has low liquidity, therefore its circuit filter is low at 2%.
SEL Manufacturing Company reported a net loss of ₹ 24.20 crores in the quarter ended March 2022 as against a net profit of ₹ 2622.22 crores during the previous quarter ended March 2021. Its sales rose 265.48% to ₹115.82 crores in the quarter ended March 2022 as against ₹ 31.69 crores during the previous quarter ended March 2021.
Circuit filters are used to regulate the price fluctuation on a day and they act as market curbs on days of euphoric or panic selling. In addition, they curb price manipulation by stock operators to an extent.
Disclaimer
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.
