This small-cap stock zoomed over 60% in one week; do you own it?

Shares of Sharda Cropchem Limited have delivered a whooping 60 per cent return in just one week. The stock stood at Rs 379.25 on January 21, 2022. It jumped 7 per cent to hit an all-time high of Rs 619.95 on BSE today, translating into gains of 63.5 per cent during the period.
 
The shares have been on an upward trend after the company posted better-than-expected earnings for the quarter ended December 2021.
 
The company reported an over 32 per cent rise in standalone net profit at Rs 74 crore for the quarter ended December 2021. Profit in the year-ago period stood at Rs 56 crore.
 
Net sales rose to Rs 710 crore in the same quarter from Rs 385 crore in the year-ago period. EBITDA margin expanded by 317 bps YoY to 19.2 per cent in 9M FY22 driven by economies of scale and effective cost management, which is marginally impacted by higher freight costs, the company said.
 
The stock has gained 70 per cent since the beginning of this year. It ended 3.92 per cent higher at Rs 601 against the previous close of Rs 578.35 on BSE.
 
In the past one year, the share price jumped from Rs 276 to Rs 619.95 mark — logging around 125 per cent return in this period. With a market capitalisation of more than Rs 5,400 crore, the shares stand higher than 5 day, 20 day, 50 day, 100 day and 200 day moving averages.
 
Brokerage house Anand Rathi is positive about Sharda’s future performance, considering its focus on registration, a rising share of high margin products and deeper penetration in markets. Further, internally-funded capex and FCF would strengthen its balance sheet. We expect its revenue/profit to clock 14/15 per cent CAGRs over FY22-24, it said.
 
“Considering the persistent strong growth momentum (a 15% PAT CAGR over FY22-24, the sturdy business model, a healthy pipeline of formulations and active-ingredient registrations, a better revenue mix across regions and consistent RoEs and RoCEs, we are upbeat about the company’s mid-to long-term prospects,” it added.
 
Further, the brokerage house noted that the assurance has risen about sustainable revenue steam, driven by a strong pipeline of registrations across regions, and its announcement of registrations of formulations and active ingredients.
 
At present, the stock trades at 11.3x FY23e and 9.4x FY24e earnings. Anand Rathi expects high growth momentum, a strong balance sheet, free cash-flows and strong return ratios over FY22-24.