Multibagger Stock: After climbing to the highest level of his lifetime At 201 level on BSE, Radhika Jeweltech shares are in consolidation stage due to profit-booking. However, this microcap multibagger stock has seen some rally in the last one week. Stock market experts are taking this uptrend as a sign of multibagger stock coming out of base building mode. Radhika Jeweltech share price is around today 165 and Bonanza Wealth Management believes the stock could go up Long term 203 level, up about 25 percent from the current price.
Highlighting valuations that can continue to fuel Radhika Jeweltech share priceThe Bonanza Wealth Management report states, “Radhika Jeweltech outsources jewelery making to specialist manufacturers, while the company is exclusively focused on sales. Radhika Jeweltech encourages manufacturers to provide sufficient orders to enable them to run at full capacity, while the exclusivity arrangement ensures that other jewelers The pass does not have access to the designs used by Radhika Jeweltech, which is unique to the Radhika brand. The manufacturing cost of the jewelery ranges between Rs 250- 350 per gram of gold depending on the market rate and the complexity of the design.”
The brokerage report further states that Radhika Jeweltech has planned a new 10,000 sq ft showroom at Kalavad Road, Rajkot, which is expected to be operational by Q2FY23E. The new showroom will be manned by around 150 sales representatives and is expected to take its revenue trajectory to a much higher level. Being located in the posh areas of Rajkot, the new showroom is expected to sell a high percentage of diamond and platinum jewelery products. Radhika Jeweltech has plans to open showrooms in other major cities like Bhavnagar, Bhuj, Gandhidham, Morbi and Jamnagar and later in other areas in and out of Gujarat as well.
“Radhika Jeweltech has a policy that once a piece of jewelery is sold to a customer, it is the policy to immediately fill in its gold inventory with the quantity of gold to be sold. Since the sale price is calculated based on the prevailing market price The immediate replenishment mitigates the risk of any rising gold prices increasing the cost of inventory. Further, the company settles bills with the manufacturers in terms of actual gold as opposed to any cash payment, Bonanza reports.
On its suggestion to situational investors regarding Radhika Jeweltech shares, the Bonanza Wealth Management report states, “With a wide range of gold and diamond studded jewelery designs for men and women, the gems and jewelery market is expected to grow at a CAGR of Rs. Expecting 8.4%, jewelery making from specialist manufacturers and outsourced 10,000 sq ft new showroom in Rajkot, we value Radhika Jeweltec to reach 13.0x FY24E EPS at Rs 15.50 target price of Rs 203.00 give, ~~25%.”
Shares of Radhika Jeweltech are one of the multibagger stocks that the Indian stock market has produced in the last one year. In this period, the share price of Radhika Jeweltec has risen from from 23.55 165.20 levels, registering an increase of over 600 per cent during this period. On Tuesday, this microcap share closed at around . closed with a market cap of 389 crores with a business volume of a little over 22,000. This multibagger stock has made 52-week high 201, which is also its life-time high. its 52-week low 23.55 per share on BSE.
Disclaimer: The views and recommendations given above are those of individual analysts or broking companies and not of Mint.