Smallcap firm Cressanda Solutions, a company that provides IT-enabled services, has minted a ton of money for its investors with the stock giving over 10,000 percent returns in just 3 years.
From ₹0.2 in November 2019 to ₹21.2 currently, the stock has skyrocketed 10,500 percent. This means an investment of ₹1 lakh in the stock 3 years ago would have become ₹1.06 crore today.
The stock has performed spectacularly in the last 1 year, soaring 600 percent. In 2022 alone, the stock is up nearly 230 percent.
However, the stock has been consolidating for the last few months after the exceptional gains. It shed 31 percent in November so far following a 14 percent decline in October.
The stock has been positive in five of the 11 months of 2022 while giving negative returns in the remaining six — considering the negative trend in November so far.
It more than doubled investor wealth in March and April 2022, rising 156 percent and 123 percent, respectively. Meanwhile, it rose 30 percent in February 2022, 13 percent in July 2022 and 3 percent in September 2022.
The stock lost 24 percent in May, 12 percent in January, 5.5 percent in August, and 1.5 percent in June.
In the June quarter (Q1FY23), the firm posted a multifold rise in its net profit at ₹73 lakh as against ₹5 lakh in the same quarter last year. Its revenue also surged from 2 lakh in Q1FY22 to ₹18 crore in Q1FY23, as per its BSE filing.
In May, Cressanda Solutions said it entered into an agreement with a large institutional client for providing tech-powered infrastructure solutions for unaddressed passenger experience in India.
"The company is poised to innovate, design, and deliver large business projects with technology and software services at its core. The software services include development of business applications, data Sciences, cloud, migration, business process optimization, digital media, technology implementation & maintenance services," a statement said.
Despite the exemplary returns, it is important to note that smallcap stocks involve exceedingly high risk than largecaps and midcaps. They provide a huge opportunity for high-risk investors but are not suitable for risk-averse investors.
Challenges associated with such stocks emanate from the fact that these are very small companies with negligible analyst coverage, very limited information on the public domain and often inaccessible insights from the management.
Disclaimer: This story is for educational purposes only. Please speak to an investment advisor before making any investment decisions.