In the world of investments, small-cap stocks often stand as both a symbol of volatility and a beacon of opportunity. These companies, with a smaller market capitalization compared to their larger counterparts, can deliver surprises to investors who are willing to navigate the unpredictable terrain of the stock market.
Amidst this backdrop of risk and reward, RMC Switchgears, the largest electrical enclosure manufacturing company in India, has emerged as one of the biggest wealth creators.
The company shares have consistently maintained an upward trajectory starting from their June 2022 low of ₹22.50 apiece to the current market price of ₹778, delivering a staggering return of nearly 3357%. During this period, an investment of ₹one lakh would have turned into over ₹34.56 lakh.
Notably, out of the last 16 months (Including September), the stock finished 11 in green, with October registering the highest monthly gain of 151%, closely followed by September 2022 with a rally of 144%.
After a period of decline from CY18 to CY20, resulting in a 75% loss of investors' wealth, the stock made a strong comeback. It delivered a solid return of 45% in CY21, followed by an outstanding gain of 1039% in the subsequent year, and in the current year so far, they have rallied 194%. Further, the stock marked a new life-time high of ₹880, jumping 4.5% in value on September 06.
On September 16, the company, in a regulatory filing, said that it received a letter of award in JV format. This order is from the Maharashtra government and is worth ₹113 crore.
RMC Switch Gears is primarily engaged in the business of `Switchgear Engineering’, `ECI contracts for power distribution/transmission sector’ and `PVC Marble and Sold Surface’.
The electrical industry has immense growth potential, especially considering the increased penetration of electricity and home improvement drive. Over the years, this industry has evolved rapidly with the increasing participation of organized players and given more emphasis on branding, the company said in its FY23 annual report.
"In this environment, we are very well positioned to deliver accelerated growth with an integrated portfolio that enables us to address the design, build, and maintain value chains for clients across industries. We have significantly enhanced our ability to address new opportunities that are now emerging," the company added.
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