Back₹1 lakh soared 1000 times to ₹10 Cr after two bonus shares: Buy the stock?
Birlasoft Ltd is a mid Cap company having a market cap of ₹9,465.58 Crore operating in the IT sector
PremiumBirlasoft Ltd is a mid Cap company having a market cap of ₹9,465.58 Crore operating in the IT sector. As part of the multibillion-dollar diversified CK Birla Group, Birlasoft is engaged in digital services, enterprise technologies and services. According to Value Research's data, Birlasoft Ltd. is a debt-free company, but what's even more intriguing is that the stock has long-term provided multibagger returns to its shareholders, which is like frosting on the cake.
Share price history of Birlasoft
The shares of Birlasoft Ltd closed today at ₹338.05 apiece level, up by 2.88% from the previous close of ₹328.60. The stock price has skyrocketed from ₹1.34 as of 12th January 2001 to the current market price which logs in a multibagger return and an all-time high of 25,127.61%. If an investor had invested ₹1 lakh on this stock from the initial stages of the company, then he/she would have gained 74,626 shares at that time. Not long after the investment on 4th January 2007 the company declared its first bonus issue in the ratio of 1:1, which alters the share count of investors and shows the new shareholding of 1,49,252 shares of the company. Again on 13th March, 2012 company issued a bonus in the ratio of 1:1, and long-term investors are sure to get an advantage out of it, as the total share count rises to 2,98,504 the value and worth of the stock increases too and sum it up to more than ₹10 Crores making the worth 1000 times more than what invested 21 years ago.
In the last 5 years, the stock has given a multibagger return of 421.60% which results in a CAGR of 35.50% approx. In the last 1 year, the stock has fallen 17.29% and on a YTD basis, the stock has fallen 40.43% so far in 2022. On the NSE, the stock had touched a 52-week-high of ₹585.85 on (10-January-2022) and a 52-week-low of ₹306.15 on (29-August-2022) indicating that at the current market price the stock is trading 42.26% below the high and 10.48% above the low. At today's closing price the stock was seen trading above the 5 days, 10 days, 20 days and 50 days EMA but below the 100 days and 200 days Exponential Moving Average (EMA). The RSI indicator reading for Birlasoft Ltd is 51.02, indicating that the stock is neither in an overbought nor oversold phase. The company has a book value per share of ₹92.25 which results in a price-to-book value (P/B) ratio of 3.66. The stock is also trading at P/E ratio of 20.11 and due to the stock's low P/B and P/E ratio, the stock is currently undervalued when compared to its peers such as Affle India, Coforge, Persistent Systems Ltd, L&T Technology Services Ltd, Mphasis and Tata Elxsi.
Should you buy the stock?
The research analysts of the broking firm Prabhudas Lilladher have recommended to ‘BUY’ the stock for short-term gains as they have maintained a target price of ₹375 and recommended keeping a stop loss of ₹320. They have said today in their research note that “The stock has maintained a decent bottom near 305 levels and currently has indicated a decent pullback to improve the bias and also to move past the descending trendline resistance level of 333 to strengthen the trend. We anticipate for further upward move with the RSI also getting stronger and is on the rise. With the chart looking attractive and having immense upside potential, we suggest and recommend a buy in this stock for an upside target of 375 keeping a stop loss of 320."
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
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