Rs 99 to Rs 309: This stock zoomed over 200% in 1 year; do you own it?

Shares of Sagar Cements Limited India surged 5 per cent to hit an intraday high of Rs 309 on BSE in an otherwise weak market. The small-cap stock has delivered more than 200 per cent return to its shareholders in the last 12 months.

In the last one year, the share price jumped from Rs 98.7 to Rs 309 mark – logging around 212 per cent return in this period. In comparison, the Nifty 50 index gained over 44 per cent and the S&P BSE Sensex rose over 45 per cent.

An amount of Rs 5 lakh invested in this multibagger stock a year ago would have turned into Rs 15.60 lakh today.

With a market capitalisation of Rs 3,472.71 crore, the share stands higher than 5 day, 10 day, 20 day, 50 day, 100 day, and 200-day moving averages.

The company reported a net profit of Rs 51.43 crore for the quarter ended June 2021 compared to a net profit of Rs 36.13 crore in the year-ago period.

Revenue from operations grew 48.6 per cent to Rs 392.57 crore in the June-ended quarter against Rs 264.12 crore a year ago. The EPS has increased to Rs 21.31 in June 2021 from Rs 16.16 in June 2020.

According to MarketsMojo, the company has declared positive results for the last 4 consecutive quarters. It has healthy long term growth as operating profit has grown by an annual rate of 44.59%.

Also, the technical trend has improved from Mildly Bullish on July 12, 2021, and the stock is technically in a Bullish range now. Multiple factors for the stock are bullish like MACD, Bollinger Band, KST, OBV and DOW.

The stock is trading at a fair value compared to its average historical valuations and with ROCE of 18.9, it has a Fair valuation with a 2.3 Enterprise value to Capital Employed. Along with generating 212% return in the last 1 year, the stock has outperformed BSE 500 in the last 3 years, 1 year and 3 months.

“Given the strong demand outlook, we expect the company’s growth trajectory to accelerate further with timely commissioning of new 2.5 MT capacity from September 2021 onwards,” noted ICICI Direct.

Shares of Sagar Cements have been split on August 17, 2021 (ex-date) pursuant to the board and shareholder approval granted for sub-division of shares in its meetings on July 1, 2021 and July 28, 2021, respectively. The record date for the same has been fixed as August 18, 2021.

Subsequently, the shares of the company have been split in the 1:5 ratio — an equity share with existing face value of Rs 10 has been subdivided into five equity shares of Rs 2 face value each.

“At the current market price of Rs 311 per share, the stock is still trading at attractive valuations of 6.4x FY23E EV/EBITDA leaving decent scope for further upside. Hence, our target price has also been revised upwards to Rs 390 per share (i.e. by raising multiple to 8.0x FY23E EV/EBITDA) vs. earlier target price of Rs 340 per share,” the research firm said.