scorecardresearchMultibagger alert! This textile stock soared from ₹5 to ₹356 in just

Multibagger alert! This textile stock soared from 5 to 356 in just 6 months

Updated: 09 Nov 2022, 03:08 PM IST

An investment of 10,000 in Baroda Rayon Corporation on June 1, would have turned into 7.1 lakh in just 6 months.

An investment of  <span class='webrupee'>₹</span>10,000 in the stock in on June 1, would have turned into  <span class='webrupee'>₹</span>7.1 lakh in just 6 months.

An investment of 10,000 in the stock in on June 1, would have turned into 7.1 lakh in just 6 months.

Shares of textile firm Baroda Rayon Corporation have given exceptional returns to its investors since June this year. From trading around 5 on June 1, 2022, the stock has skyrocketed to 356 currently (November 9), giving its investors a massive 7,020 percent.

This means an investment of 10,000 in the stock in on June 1, would have turned into 7.1 lakh in just 6 months.

The scrip has rallied every month since June 2022. It gave multibagger returns in 4 of them. The stock surged 100 percent in June, 163 percent each in July and August, and 191 percent in September.

In October and November (so far), the stock added 25 percent and 34 percent, respectively.

The stock has been hitting its 5 percent-upper circuit for the past 9 sessions consecutively (since October 27).

The stock hit its 52-week low of 4.4 on June 1, 2022, and since then it has surged over 7000 percent to it its 52-week high of 356 today (November 9).

Baoda Rayon stock price trend

The Baroda Rayon Corporation Limited (BRCL), a public company, was incorporated in 1958 by Gaekwad Chinai and Company Private Limited as Managing Agents. The Company is engaged in the textile industry, in Surat, Gujarat. It is involved in the manufacturing and sale of viscose filament yarn, nylon yarn, polyester yarn, and other byproducts.

In the full financial year FY22, the company's standalone profit came in at 374 crore as against a loss of 123 crore in the previous financial year FY21.

Its total income surged 1233 percent to 41 crore in FY22 from 3 crore in FY21.

It is a penny stock with a market capitalisation of 778 crore.

Despite the stellar return, it is important to note that penny stocks are high-risk stocks and not suitable for investors with a risk-averse approach. Only high-risk investors should invest in such stocks and in very small weightage. Please consult your financial advisor before making any changes to your portfolio.

Challenges associated with penny 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. Along with these fundamental challenges, the stock specifically is vulnerable to challenges pertaining to the security of such characteristics as the vulnerability to risks of illiquidity, impact cost and typical challenges associated with slim volumes.

Unless there is a really strong reason, investing in penny stocks is not generally recommended to serious, long-term investors.

Disclaimer: This story is for educational purposes only. Please speak to an investment advisor before making any investment decisions.

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First Published: 09 Nov 2022, 03:08 PM IST