₹1.55 to ₹274: Multibagger penny stock turns ₹1 lakh into ₹1.76 crore in twelve years

Multibagger penny stock: The Indian stock market has produced numerous multibaggers over the last decade, creating substantial wealth for retail investors who believe that long-term investments are key to achieving phenomenal returns. One such stock in this regard is Fineotex Chemical, which has maintained a steady upward trend on Dalal Street, surging to new highs year after year. The company's shares, which were valued at ₹26.95 apiece in 2019, have grown by 916% to trade at the current price of ₹274 apiece.

Looking further back, the stock has delivered an even more tremendous return of 17,600%, rising from ₹1.55 apiece to its current level. For perspective, an investor who invested ₹1 lakh in the stock five years ago and held onto the investment would have seen its value grow to ₹1.76 crore, highlighting the power of the stock market when the right stocks are chosen for investment.

Fineotex Chemical is also part of ace investor Ashish Kacholia's portfolio, shows the latest shareholding pattern on BSE. Kacholia holds 31,35,568 shares of the company, representing a 2.74% stake.

Company Overview

The company is one of the leading Indian multinational specialty performance chemical producers and provides sustainable, technology-driven solutions to several industries, especially textile and garment processing, cleaning and homecare, water treatment, and oil and gas.

It offers a complete range of products for the pretreatment, dyeing, printing, and finishing of textile processing to customers across the globe. The company's strategic expansion into the cleaning and hygiene sector has provided it a competitive advantage. Many chemical compounds used in the textile segment have direct applications in cleaning and hygiene, a sector showing steady growth and promising acceleration.

This diversification strengthens Fineotex’s business and revenue streams while leveraging its core competencies. The company now has a portfolio of over 470 products across categories. Fineotex Chemical serves clients in 69 countries with a robust network of 102 distributors in India.

On Saturday, the company announced its biotechnology-based mosquito control solution, AquaStrike Premium (a formulation based on Azadirachtin), through its wholly owned subsidiary, FSPL Private Limited. The solution received approval from the Central Insecticide Board, Government of India, for technical import and formulation under the Insecticides Act, 1968.

With this approval, the company is set to redefine mosquito control strategies in India, offering a powerful, safe, and sustainable approach to tackling vector-borne diseases, as per the company's exchange filing. 

Financial Snapshot

Looking at its financial performance, the company consolidated revenue from operations in Q3 FY25 stood at ₹130.91 crore, a slight decline of 9% compared to ₹143.39 crore in Q3 FY24. The dip in revenue can be attributed to muted demand in the FMCG sector, which is one of the key sectors the company caters to. Operating EBITDA for Q3 FY25 was ₹34.29 crore, with an operating EBITDA margin of 27.2%. The company's profit after tax (PAT) for the quarter was ₹28 crore, a 15% drop as compared to ₹33 crore in Q3FY24. 

Growth Opportunities

The Indian home care market is valued at ₹37,000 crore in 2023 and is projected to grow at a CAGR of over 5% over the next five years. With per capita annual detergent consumption of 2.7-3 kg, still below that of developed countries, there is substantial room for growth. Factors such as rapid urbanization, the rise of nuclear families, and increasing disposable incomes are driving demand for higher-quality and premium products.

The company stated it is strategically positioned to leverage these market opportunities by continuously evolving its product portfolio to meet the changing needs of consumers.

"We remain committed to strengthening our leadership position by investing in advanced technology, expanding our infrastructure, enhancing our manufacturing capabilities, and focusing on product development and market expansion. Our forward-looking approach ensures we are prepared to address future challenges and capitalize on growth opportunities, delivering sustained value and excellence for our stakeholders," the company said in its latest annual report.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.