At least two dozen microcaps have been buzzing on Dalal Street due to two reasons. Firstly, they have delivered over 100 per cent return to investors in the past one year despite volatility in the equity market owing to sustained outflows by foreign institutional investors, geopolitical tensions and rising interest rates. Secondly, they have recently reported over 100 per cent year-on-year growth in net profit for the latest quarter ended June 30.
With a rally of 1,880 per cent, Sadhna Broadcast emerged as the top gainer in the list. Shares of the company climbed to Rs 20 on August 29, 2022 from Rs 1.01 on August 27 last year. Net profit of the company also jumped 124 per cent year-on-year to Rs 0.35 crore in Q1FY23 over Rs 0.16 in Q1FY22.
It should be noted that we considered firms having a market capitalisation of up to Rs 200 crore and which are available at Rs 50 or less. Before going ahead, here is a disclaimer that microcaps are highly risky and investors should consult their financial advisors before taking any positions in such stocks.
Maitri Enterprises is the next player on the list. Shares of the company gained 472 per cent during the past one year. The bottom line of Maitri Enterprises also grew 130 per cent YoY at Rs 0.03 crore in Q1FY23.
Likewise, Beekay Niryat, Panafic Industrials, ObjectOne Information Systems, Rama Vision, Morgan Ventures, Prakash Steelage, VSF Projects, Marble City India, Utique Enterprises, Shree Pacetronix, Sunil Industries, Anik Industries, Hittco Tools and Unique Organics stood among other players whose share price jumped more than 100 per cent in the past one year. Net profit of these companies also more than doubled in Q1FY23.
Data further highlighted that KCL Infra Projects also climbed 151 per cent in the past one year. It was followed by Mini Diamonds (India) (up 144 per cent), BSEL Infrastructure Realty (up 140 per cent), D&H India (up 116 per cent), Bloom Industries (up 111 per cent), Dhanashree Electronics (up 106 per cent), Adroit Infotech (up 103 per cent) and Mega Corporation (up 100 per cent) stood among other major gainers in the list. These companies also reported over 100 per cent rise in net profit in Q1FY22.
How to spot such multibaggers on Dalal Street?
Kanpur-based investor Ekansh Mittal, Founder of Katalyst Wealth said, “I usually invest in growth stocks which are available at reasonable valuations. For such companies, we also look at the opportunity size, industry growth and whether the company seems capable enough to capitalise on the vast opportunity.” Mittal is known for picking quality companies at an early stage.
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