Multibagger marvel: This small-cap stock turned Rs 1 lakh into Rs 1 crore

Investing in stocks has the potential to turn investors into millionaires or even billionaires, as numerous success stories attest. Recently, I came across a stock that transformed an investment of Rs 1 lakh into Rs 1 crore in the past decade.

Equity is widely regarded as riskier than other asset classes, such as gold. However, alongside its inherent risk, it possesses the extraordinary capability to generate impressive multibagger returns over time. As the saying goes, the greater the risk, the higher the potential return. You may have encountered this principle before.

Stock Performance

The company’s stock commenced the day on the BSE at Rs 1240 per share, surpassing the previous day’s closing price. In the intraday session, it reached highs and lows of Rs 1,257 and Rs 1,240, respectively. Moreover, the stock hit its upper circuit limit of 5% during the day and concluded at Rs 1,257 per share on the BSE.

The stock crossed its peak levels from the year 2008, reaching Rs 670 in December 2023. Following this breakout, the stock has witnessed a rally of approximately 90%, indicating a significant and positive momentum in its performance.

With a current market capitalisation of Rs 20,168 crore, the stock has delivered a remarkable multibagger return of approximately 2,320% over the past year. Furthermore, it has exhibited an extraordinary return of 11,400% over the past decade. An investment of Rs 1 Lakh has grown to over Rs 1.15 crore in the past 10 years.

Stocks Chart (Monthly)

Financial Performance:

During the December quarter, the company reported revenues of Rs 1,539 crore, compared to the revenue of Rs 1,537 crore in the same quarter last year. The company’s operating profit stood at Rs 247 crore, resulting in an operating profit margin of 16%, compared to an operating profit of Rs 70 crore. Moreover, the company reported a net profit of Rs 235 crore, compared to a net profit of Rs 28 crore. The company’s net profit showed a significant growth of around 740% YoY.

Business Overview

Let me disclose the name of the company: Jai Balaji Industries Limited is involved in the manufacturing of iron and steel products. The company’s product range encompasses sponge iron, pig iron, ductile iron pipe, ferrochrome, billet, thermo-mechanically treated (TMT) products, coke, and sinter, all produced with the support of a captive power plant. The company operates eight integrated steel manufacturing units located across India in the states of West Bengal, Chhattisgarh, Orissa, and Jharkhand.

Jai Balaji Industries boasts a diverse portfolio of value-added products, including Direct Reduced Iron (DRI or Sponge iron), Pig iron, Ferro Alloys, Alloy and Mild Steel Billets, Reinforcement Steel TMT Bars, Wire Rods, Ductile Iron Pipes, Alloy and Mild Steel Heavy Rounds. Collectively, these units have a combined production capacity exceeding 27,40,000 tons per annum.

The company’s actual production capabilities encompass approximately 4,45,000 tons per annum of direct reduced iron (DRI), over 509,250 tons per annum of pig iron, approximately 106,000 tons per annum of ferroalloys, and over 10,20,430 tons per annum of alloy and MS billets. Jai Balaji Industries Limited thus stands as a significant player in the iron and steel industry with a robust manufacturing infrastructure and an extensive range of quality products.

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.