₹0.05 to ₹20: Multibagger penny stock turns ₹1 lakh into ₹4 crore in five years | Stock Market News

Multibagger stock: Investing in the stock market is often viewed as a journey that requires both patience and strategy. Investors who identify promising companies early and remain committed to their holdings typically reap the greatest rewards. Unlike short-term trading, which focuses on quick gains, long-term investors recognize the importance of staying invested in companies with solid fundamentals, strong growth potential, and industry leadership.

One such stock is Raj Rayon Industries, which has rewarded its investors with multibagger returns.

Raj Rayon Industries Limited, founded in 1993 and located in Silvassa, India, focuses on producing and trading polyester chips along with a diverse range of polyester and processed yarns.

The company’s product lineup features trilobal, cationic, cotluk, colored, fire-retardant, anti-microbial, tri-lobal, and octa-lobal yarns. Additionally, it offers full dull, semi-dull, doped-dyed yarns, micro filaments, and yarns with different degrees of intermingling, ranging from non-intermingle to high intermingle.

Raj Rayon Industries also caters to global markets by exporting its products to various countries, including Brazil, Chile, Colombia, Egypt, Guatemala, Iran, Mexico, Morocco, Peru, Poland, Spain, Syria, Thailand, and Vietnam. The company was initially called Raj Rayon Limited before changing its name to its current form in August 2010.

Multibagger returns

Over the past five years, the Raj Rayon Industries stock has surged multifold from ₹0.05 to ₹20 per share, delivering gains nearly 39,960 per cent on National Stock Exchange (NSE).

As mentioned, Raj Rayon Industries’ share price has risen from ₹0.05 apiece to ₹20 apiece in the last five years, logging 400 times rally. So, if a positional long-term investor had invested in this penny stock five years ago and had remained invested throughout this period, its ₹1 lakh would have turned into ₹4 crore ( ₹1 lakh x 400) in this time horizon.

However, in the short-term the stock hasn’t impressed investors. Over the past one month, the stock has plunged nearly 13 per cent but has risen over 3 per cent in the last one year.

April showed impressive performance with nearly a 6 percent increase, following a significant decline of over 19 per cent in March. Before that, the stock had surged more than 48 percent in February after experiencing a 4.4 percent drop in January.

The multibagger stock had hit an intraday high to ₹84.65 on March 3, 2023 on NSE. Currently trading at ₹20, it is now over 76 percent away from its year high.

Financial performance

The company achieved a significant 32.12 per cent year-on-year (YoY) increase in revenue. However, it reported a net loss of ₹3.48 crore for the quarter, contrasting with a profit of ₹0.29 crore during the same period last year. Additionally, there was a sequential decline of 6.84 per cent in revenue compared to the previous quarter.

Investing in penny stocks can be appealing because of the possibility of high returns from a modest initial investment. However, this area of the market carries considerable risks. To effectively manage the fluctuations associated with penny stocks, investors should conduct comprehensive research and implement robust risk management techniques. Key actions involve analyzing the company’s fundamentals, evaluating its market standing, and examining its financial stability.

Disclaimer: The views and recommendations provided in this analysis are those of individual analysts or broking companies, not Mint. We strongly advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and individual circumstances may vary.