From ₹ 310 to ₹ 738.05 apiece, the shares of this multibagger textile stock zoomed 138.08% in a month’s time. If an investor would have invested ₹ 1 lakh in the company’s shares a month ago, the value of their holdings would have been ₹ 2.38 lakhs today!
With a market capitalization of ₹ 300 crores, Suryalata Spinning Mills (SSM) is a small-cap stock in the textile sector. The company manufactures and sells yarns such as polyester spun yarn, blended yarn and so on.
The company’s shares hit the 5% upper circuit and are locked at ₹ 738.05 apiece in an otherwise weak market. This price is also its lifetime high. 45,577 shares had changed hands during Monday’s early trades. Moreover, the share price gained a whopping 37.81% in the past five days.
SSM has a high return on equity of 27.77% and an ideal debt-to-equity ratio of 0.29. Its shares were trading at a price-to-earnings ratio (P/E) of 5.83, which is significantly lower than the industry average of 60.39, indicating that the stock might be undervalued.
Value Investor Manish Goel in his blog mentioned why he bought the shares of SSM. Quoting Warren Buffet, he said that the most important thing to look at before buying a stock is “Management Quality”.
He highlighted that one unique quality about the management impressed him. The promoters/management were giving dividends to the public shareholders, but were waiving off their own dividends and indicated that it was rare.
Written by Simran Bafna
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