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Some small-cap and penny stocks have produced multibagger returns in the downturn market, where the domestic market is trading close to 52-week-lows; however, as it is well known that penny stocks are popular among investors seeking a high risk to high reward ratio, these stocks may be considered for a short period of time. One of the multibagger stocks, Lloyds Steels Industries has gained 306.90 per cent in a year. It is now locked in the upper circuit on the NSE and has been on a positive trend for the last 7 days.
The stock has climbed from ₹1.70 on July 7, 2017, to the current market price of ₹11.80 during the past five years, representing a multibagger return of 594.12%. In the last 1 year, the stock has risen from ₹2.90 to the current level, which indicates a multibagger return of 306.90% in that period. The stock, however, has declined from ₹20.65 to the current level on a year-to-date (YTD) basis, representing a drop of 42.86 per cent so far in 2022. The stock has fallen 42.86 per cent over the past six months, and 2.48 per cent during the past month. The stock went up from ₹9.80 to the current level throughout the course of the last five trading days, up by 20.41 per cent. The stock has been rising for the previous 7 days, returning around 40 per cent during that time. Today during trading while trapped in the upper circuit, 31,62,299 shares were traded.
With a market valuation of ₹1,166 crore, Lloyds Steels Industries Ltd. is a small-cap company that operates in the ferrous metal industry. The company is engaged in manufacturing heavy equipment, machinery and systems for the hydrocarbon sector, oil & gas, steel plants, power plants, nuclear plant boilers and turnkey projects for industries like hydrocarbon, steel, nuclear power, marine, Ports, Jetti and refineries as well as EPC/Civil.
The stock reached a 52-week high of Rs. 28.80 on January 12, 2022, and a 52-week low of Rs. 2.55 on August 24, 2021, meaning that it is now trading 59 per cent below its 52-week high and 362 per cent above its 52-week low, representing the highest recovery from the low. The stock has increased by 306 per cent over the course of a year, outpacing the Nifty 50 by 0.19 per cent during that time. The stock price has performed at a CAGR of around 450 per cent over the past year.
As of May 2022, the promoter shareholding in the company was 57.65 per cent, which has been steadily rising since 2019, while the public shareholding is at 42.29 per cent, which is the lowest level since 2019. A good liquidity status is shown by the company's current ratio of 5.13 as of March 2022, which is the highest since March 2018. For the quarter that ended in March 2022, the firm recorded its highest PAT of ₹5.95 Cr and its highest ROE of ₹4.39 Cr, which is the highest since 2018. The company has provided significant profit growth of almost 40 per cent CAGR over the previous five years.
With a PE ratio of 171 and a ROCE of almost 9%, the firm has a low debt-to-equity ratio of 0.14 per cent. The stock's EV/EBITDA ratio is 86.96x, while its Price/BV ratio is 9.34x. The firm has a book value per share of 1.46, meaning that the stock is selling at a PB of 8.08 times the book value currently. On the basis of the current market price, the stock is trading above the 5 and 20-day moving averages, but below the 50, 100, and 200-day moving averages.