Small cap stocks are very high risk. However, if can pick as good small cap stock, it can turn to be multibagger stock. Do you know that one Small cap stock in the food processing segment has turned 1 Lac to 2 Crores in the last 6 years. This is the power of small cap multibagger stock. In this article we would provide the details of GRM Overseas stock that generated 19,600% returns in the last 6 years.
About GRM Overseas Limited
GRM Overseas Ltd is primarily engaged in the business of milling, processing and marketing of branded and non-branded basmati rice in the domestic and overseas market.
The company markets their products under the brand name Kamdhenu and Chef and export basmati rice to Saudi Arabia, Europe and other countries.
GRM Overseas – Last 5 years Financial Performance
Its consolidated revenues increased from Rs 591 Crores in FY2017 to Rs 799 Crores in FY2021.
Its margins improved significantly from Rs 5 crores in FY2017 to Rs 45 crores in FY2021.
You may like: Best Midcap Multibagger Stocks – Tripled every 3 years
GRM Overseas – Snapshot of Last Quarter Results
Its latest quarterly results indicate that revenues have increased from Rs 213 Crores for Qtr ending Dec-20 to Rs 296 Crores for Qtr ending Dec-21.
Even its profits have increased from Rs 5 Crores to Rs 26 Crores for a similar period.
Positive factors in this stock
Strong revenue growth in the last 5 years.
Strong margin growth in the last 5 years.
ROA Improving in the last 2 years.
Book value per share increasing in the last 2 years.
Earnings per share (EPS) has seen a significant increase from Rs 15.14 per share in FY2017 to Rs 121.92 per share in FY2021.
It did not declare any dividend in FY2017, however, started declaring dividend from 2018 onwards. It declared dividend of Rs 5 per share for FY18, FY9 and FY20. However, for FY21 it declared higher dividend of Rs 20 per share.
The company had negative cash flow from operating activities in FY2017. It has improved this to positive cash flow from FY2020 onwards. Even overall cash flow has turned positive in FY2021.
Company with zero promoter’s pledge.
We could see strong momentum in share price for short, medium and long term averages.
Negative or risk factors in this stock
Increase in non-core income.
Stock trading at high P/E of 48x compared to industry P/E of 16x.
It has a low market cap and current trading around 100,000 shares in the market.
Share Price Performance of this multibagger Smallcap stock (as of 20-Feb-22)
Last 1 month – Minus 35%
Last 1 year – 973%
Last 3 years – 3,950%
Last 6 years – 19,600% (1 Lac turned 1.97 Crores)
2016-2019 (3 years) – 400% (1 Lac turned 5 Lacs)
2019-2022 (3 years) – 3,950% (1 Lac turned 40.5 Lacs)
This stock seen significant movement in share price from Oct-2021 onwards (last 4 months).
This stock is showing technically very bullish except for recent market correction time.
Disclaimer: I do not hold above stock as on the day of writing the article. However, I may purchase stocks that have similar strategies. I generally do this analysis for my personal investments and also post on this blog which might be useful for others too in identifying such potential multibagger stocks. Investment in direct stocks is a high risk. Investors should consult their financial advisor before investing in such stocks.
Did you like our IPO Analysis, then share it with your friends on WhatsApp, FB, Twitter and Telegram?
- 10.5% Muthoot Mercantile NCD December 2023 – Issue Details and Review - November 26, 2023
- 8.6% Cholamandalam Investment and Finance NCD Nov-2023 – Issue Details and Review - November 25, 2023
- 12.5% ICL Fincorp NCD November 2023 – Issue details and Review - November 24, 2023