₹6.38 to ₹70.90: Kisan Mouldings penny stock gives 1,011% return in just one year
Shares of pipe manufacturing firm Kisan Mouldings, which was a penny stock till last year, have given robust multibagger returns to their investors in the last 1 year. This penny stock has skyrocketed over 1,011 percent in this period, from ₹6.38 in March 2023 to currently trade at ₹70.90.
Shares of pipe manufacturing firm Kisan Mouldings, which was a penny stock till last year, have given robust multibagger returns to their investors in the last 1 year. This penny stock has skyrocketed over 1,011 percent in this period, from ₹6.38 in March 2023 to currently trade at ₹70.90. Meanwhile, in the last 4 years, since March 2020, the stock has also given multifold returns, soaring 885 percent from ₹7.20.
However, in 2024 year-to-date (YTD), the stock has surged over 449 percent, giving positive returns in all 4 months so far. It jumped almost 15 percent in April so far after a 45.4 percent jump in March, a 170 percent rally in February and a 19.6 percent rise in January 2024.
Before January 2024, the stock had given negative returns in 3 straight months from October till December 2023. In that period, it had fallen 18.5 percent.
The stock hit its 52-week high of ₹69.51 in intra-day deals today, April 9, 2024. It has now jumped over 867 percent from its 52-week low of ₹7.33, hit on April 17, 2023.
About the firm
Kisan Mouldings Limited manufactures and sells pipes and fittings for water management, irrigation, water distribution, cable ducting, drinking water, tube wells, and sewage disposal systems in India. It offers various pipes, including chlorinated polyvinyl chloride plumbing systems, free-flow unplasticized polyvinyl chloride (UPVC) plumbing pipes, composite piping systems, soil, waste, and rainwater pipes and fittings, etc.
The company also provides rubber lubricants; molded furniture; solvent cement used for joining the pipes and fittings; and molded articles, such as ghamelas. It offers its products to architects, builders, farmers, and individuals under the KISAN and KML CLASSIC brands. The company was founded in 1982 and is headquartered in Mumbai, India.
In the previous Month (March 2024), Apollo Pipes Ltd, part of the APL Apollo group, acquired a 53.57 percent majority stake in Kisan Mouldings Ltd (KML) for ₹118.40 crore, aiming to bolster its position in the PVC pipes and fittings sector.
In an exchange filing, Apollo Pipes said that it secured the stake via a preferential issue of 6,40,00,000 equity shares, priced at ₹18.50 per share with a face value of ₹10 each. This capital infusion has led to Kisan Mouldings becoming a subsidiary of Apollo Pipes.
“The transaction is a strategic and financial fit that will bring significant synergies and market opportunities. KML brings the lengthy experience of almost 35 years in the PVC industry and an extensive range of SKUs (stock keeping units)," Sameer Gupta, chairman and managing director, Apollo Pipes said.
Earnings
In the December quarter, Kisan Mouldings posted a net loss of ₹16.6 crore, widening from a net loss of ₹15.55 crore during the previous quarter ended December 2022. However, its revenue in the quarter ended December 2023 declined a minor 1.4 percent to ₹66.19 crore versus ₹67.11 crore in the corresponding quarter last year.
Brokerage view
According to ICICI Direct, Kisan Mouldings exhibits several strengths, like it hit a new high today as well as decreasing Promoter pledge. Additionally, the stock has demonstrated strong momentum, with its price above short, medium and long-term moving averages. These strengths underscore the company's ability to generate profits, optimise capital utilisation, and deliver value to its shareholders.
Meanwhile, its weaknesses, as per the brokerage, are:
- Degrowth in quarterly revenue and profit in recent results (YoY).
- Declining profits every quarter for the past 2 quarters.
- Low Piotroski Score: Companies with weak financials.
About penny stocks
Investing in penny stocks can be alluring due to the potential for high returns, but it's crucial to acknowledge the substantial risks involved. These stocks may not be suitable for everyone, especially those who are risk-averse. Only individuals comfortable with high-risk investments and willing to allocate a small portion of their portfolio should consider them. Seeking guidance from a financial advisor before making any decisions is highly recommended.
Penny stocks come with several challenges. They often represent small, lesser-known companies with minimal analyst coverage and limited publicly available information. Moreover, the lack of transparency and access to management insights further complicates investment decisions.
Furthermore, penny stocks are susceptible to various risks, such as illiquidity, high-impact costs, and difficulties associated with low trading volumes. Unless there are compelling reasons supported by thorough research, investing in penny stocks is generally not advisable for serious, long-term investors seeking stability and growth in their portfolios.
Disclaimer: This story is for educational purposes only. Please speak to an investment advisor before making any investment decisions.
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