From Rs 30 to Rs 300: This Maharatna company surged over 900%, do you own it?

REC, designated as a ‘Maharatna’ enterprise, operates under the oversight of the Ministry of Power, Government of India, and is primarily engaged in providing financial support to projects across the entire spectrum of the power sector, encompassing activities from power generation to distribution. The company has witnessed a significant surge in its stock price today.

Today, the shares of the company have surged by over 9% during the day. Moreover, the stock has reached a significant milestone of Rs 300 per share on the BSE. At the beginning of the day, the stock opened at Rs 287.55 per share, representing a 1.7% increase from the previous day’s closing price of Rs 282.85 per share on the BSE. During the day, the stock reached a new 52-week high of Rs 307.35 per share, and as of now, it is trading at Rs 304 per share.

Looking at the historical prices, the stock’s price was Rs 30 per share in January 2009. From that point, the stock surged by 400% until July 2010, reaching Rs 155 per share. From that day, the stock entered a consolidation period within a range of approximately Rs 60 per share on the lower side to around Rs 135 on the upper side on a quarterly time frame. The price was trading within this range for approximately 4,567 days or 12.5 years. Finally, in May 2023, the stock broke out from this range and surged over 115% from the breakout levels to its current value.

The current market capitalisation of the company stands at Rs 80,102 crore, and the stock has generated an impressive multibagger return of over 194% in the last year and 288% in the last three years. However, for any investor who bought the shares for Rs 30 per share, the return would be over 900% based on the current market price on the BSE.

Financial Information: 

In the September quarter of FY24, the company experienced a significant increase in its revenue from operations, rising from Rs 9,956 crore to Rs 11,688 crore, marking a 17.4% increase. Meanwhile, the company’s net profit for the quarter amounted to Rs 3,790 crore, a significant increase compared to the profit of Rs 2,732 crore in the corresponding quarter of the previous year.

The company’s ROCE (Return on Capital Employed) and ROE (Return on Equity) are 9% and 20%, respectively. The company’s shares are trading at a P/E (Price-to-Earnings) ratio of 6 times in the market. In addition to this, the company’s book value stands at Rs 241 and the price to book value comes out to be 1.26 times.

Stock Chart (Quarterly time frame): 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.