The scrip has also given multibagger returns this year so far as well as in the last one year. The stock has skyrocketed around 270 percent in 2024 YTD from ₹91.95 in December 2023 to touch its record high of ₹340.10. It hit its 5 percent upper circuit for the seventh straight session today.
Meanwhile, it has soared over 747 percent in the last one year.
This recent surge has led to the stock soar 872 percent from its 52-week low of ₹35.00, hit on June 6, 2023.
This year so far, the scrip has given positive returns in all 5 months till date. The stock has rallied over 40 percent in May, extending gains for the fifth straight month. Meanwhile, it surged almost 68 percent in April, over 18 percent in March, almost 24 percent in February and over 7 percent in January 2024.
However, it is important to note that the stock is currently trading under ASM LT: Stage 4
What is ASM?
ASM, or “Additional Surveillance Measure,” is a regulatory mechanism in the stock market implemented by stock exchanges to closely monitor certain securities. This framework enhances market integrity and protects investors’ interests by identifying securities with high price volatility, unusual trading volumes, or other risks.
Securities flagged under the ASM framework are subjected to additional surveillance measures such as stricter margin requirements and increased disclosure obligations. The goal is to curb manipulative activities, excessive speculation, and price distortions, thereby maintaining market stability.
Investors should be mindful of the ASM status of stocks and keep track of changes in the framework, as it can impact trading activities and investment strategies.
The ASM framework now includes two key aspects:
Long-Term (LT) ASM Framework: This focuses on long-term measures to monitor and control stock market trading activities that could lead to volatility or irregularities over an extended period.
Short-Term (ST) ASM Framework: This addresses short-term market fluctuations and potential risks by implementing immediate and temporary measures to stabilise the market and protect investors.
About the firm
Swadeshi Polytex Limited engages in the real estate business in India. It engages in developing, purchasing, selling, owning, letting, leasing, sub-leasing, letting, and sub-letting real estate properties, including land, plots, buildings, factories, and warehouses, as well as residential, commercial, agricultural, industrial, rural, and urban infrastructures. The company was incorporated in 1970 and is based in Ghaziabad, India.
Earnings
In the December quarter (Q4FY24), the net profit of Swadeshi Polytex surged multifold over 450 percent year-on-year (YoY) to ₹45.75 crore from ₹7.88 crore in Q3FY23. Meanwhile, its total income also jumped 431.5 percent YoY to ₹56.4 crore in the quarter under review as against ₹10.61 crore in the same quarter last year.
Brokerage view
According to ICICI Direct’s analysis, Swadeshi Polytex exhibits several positive factors contributing to its strong momentum in the market. Firstly, the stock’s price is performing well, as it is currently trading above its short-, medium-, and long-term moving averages, indicating an upward trend and positive market sentiment. Also, it has a high TTM (trailing twelve months) earnings per share (EPS) growth, demonstrating its financial strength and ability to generate increasing profits over time.
Additionally, the stock has reached a new 52-week high today, signalling strong performance and attracting attention from investors. These factors suggest that Swadeshi Polytex is positioned for potential continued success in the market.
Meanwhile, its only weakness, as per the brokerage, is that it has a declining net cash flow, which means that the company is not able to generate net cash.
Investing in shares of small companies with low market capitalisation can provide opportunities for substantial gains due to their lower stock prices. However, these investments carry important risks. These stocks often have limited liquidity, resulting in fewer transactions compared to larger stocks. They also tend to lack the rigorous financial reporting and oversight found in larger companies, making them more vulnerable to price manipulation and fraud.
Due to their limited liquidity and less oversight, small company stocks often experience high volatility, increasing the risks for investors. Thorough research and careful risk management strategies are essential to navigate the uncertainties of these stocks and reduce potential losses.
Disclaimer: This story is for educational purposes only. Please speak to an investment advisor before making any investment decisions.
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Published: 10 May 2024, 04:57 PM IST