This small-cap stock continues to deliver multibagger returns for 4th straight year; up 4800% in just 2 years

In the fast-paced world of investing, finding a multi-bagger stock that can deliver extraordinary returns within a short period of time is the dream of every investor. Such dreams turned into reality for investors of Servotech Power Systems, as company shares delivered a phenomenal return. 

The shares, which were trading at a mere ₹3.50 apiece two years ago, have seen a meteoric rise of 4,804% to trade at the current market price of ₹171.65. If an investor invested ₹1 lakh in the shares during this period and remained invested until the present day, the wealth would have grown to a staggering ₹49 lakh.

In addition, from its all-time low of ₹1.30 apiece in January 2020, the stock has zoomed 13,000% to date. What makes this achievement even more remarkable is the consistent annual performance of the stock.

In every year since CY20, the stock has delivered a multi-bagger return. In CY20, CY21, and CY22, the stock generated returns of 194%, 247%, and 110.24%, respectively. So far in the current year, the stock is up by 440%, jumping in value from ₹32.40 to ₹171.65. On June 21, the stock jumped over 4.30% to hit a new all-time high of ₹200 apiece.

Servotech Power Systems is a small-cap stock with a market capitalization of ₹1,825 crore. It is engaged in the end-to-end manufacturing, procurement, and distribution of a range of high-end yet advanced solar products, medical devices, and energy-efficient lighting solutions.

The company has expanded its portfolio by venturing into the electric vehicle (EV) market, unveiling a range of high-tech EV charging equipment. The company intends to establish EV charging technology infrastructure in India expeditiously and bolster the nation’s progression towards the electric revolution.

As of July 2023, as many as 8,738 public EV charging stations were operational in India. The Indian Government allocates subsidies of ₹800 crore to set up 22,000 fast chargers at various fuel pumps across India.

The government has sanctioned 2,877 such charging stations across 68 cities in 25 states and UTs. In addition, 1,576 charging stations on nine expressways and 16 highways have also been sanctioned, as per the company's exchange filing.

The recent projections indicate that fast-charging stations will witness a CAGR of 40% by 2025. Servotech Power Systems stands to benefit significantly from the burgeoning demand in this space.

For the June-ending quarter, the company reported a 1,038% YoY jump in its consolidated net profit of ₹4.10 crore. In comparison, during the corresponding period last year, the company's net profit stood at ₹0.35 crore. However, in contrast to the preceding March quarter, the net profit experienced a 32% decline.

In comparison, during the corresponding period last year, the company's net profit stood at ₹0.35 crore. However, in contrast to the preceding March quarter, the net profit experienced a 32% decline. On the operating front, the EBITDA showcased a remarkable 409.62% YoY increase, reaching ₹6.88 crore, while the EBITDA Margin soared by 105% YoY to 8.65%.

Looking at the broader picture, the company concluded FY23 on a high note, achieving a total net profit of ₹11 crore, a significant 175% increase over FY22's net profit of ₹4 crore. Furthermore, the revenue from operations surged to ₹278 crore, reflecting a remarkable 93% YoY growth.

Meanwhile, the board of directors of the company has declared a stock split in a 1:2 ratio and set a record date for the Split for July 28, 2023.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of MintGenie.