Multibagger Alert! SJVN soars 490% in 4 years, jumps from ₹20.75 to 122.4
An investment of ₹1 lakh in this stock in March 2022 would have turned into over ₹5.9 lakh now.
SJVN Limited, together with its subsidiaries, engages in the generation and sale of electricity in India, Nepal, and Bhutan. The company is also involved in thermal power, hydropower, wind power, solar power, and power transmission businesses. In addition, it provides consultancy services in the field of hydroelectric projects, highway tunnels, railway tunnels, etc., as well as project management services.
The company was formerly known as Satluj Jal Vidyut Nigam Limited and changed its name to SJVN Limited in September 2009. SJVN Limited was incorporated in 1988 and is based in Shimla, India.
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The stock has surged 290 percent in the last 1 year and over 34.5 percent in 2024 YTD, giving positive returns in all 2 of the 3 months this year so far.
It has jumped almost 1 percent in March so far, after an 8 percent decline in February and a 45 percent surge in January this year.
Currently trading at ₹122.4, the stock is over 28 percent away from its record high of ₹170.45, hit earlier last month on February 5, 2024. Meanwhile, it has soared 303 percent from its 52-week low of ₹30.39, hit on March 27, 2023.
Read here: Multibagger! This penny stock turned ₹10k to over ₹2 lakh in just 2 years
The significant upward movement reflects a strong wave of market optimism and positive sentiment surrounding the stock, signifying a notable milestone for the company amidst the current market landscape.
Earnings
In the December quarter (Q3FY24), the company posted a significant year-on-year decrease of 51.6 percent in its net profit at ₹139 crore. According to a regulatory filing, SJVN reported a net profit of ₹287 crore for the corresponding quarter last year. Meanwhile, the company’s revenue from operations saw a marginal decrease of 1.6 percent to ₹543.3 crore as against ₹552 crore in the same period of the previous fiscal year.
At the operational level, SJVN witnessed a 3.2 percent decline in EBITDA, which stood at ₹368.5 crore for the third quarter of this fiscal year, compared to ₹380.6 crore year-over-year. The EBITDA margin for the reporting quarter was noted at 67.8 percent, down from 69 percent in the corresponding period of the preceding fiscal year.
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Brokerage view
According to ICICI Direct, the stock has been witnessing strong momentum – Its stock price is above short, medium and long-term moving averages. Meanwhile, its Book Value per share has also been improving for the last 2 years.
Meanwhile, its weaknesses, as per the brokerage are –
– Inefficient use of assets to generate profits – ROA declining in the last 2 years
– Degrowth in revenue and profit
– Degrowth in quarterly revenue and profit in recent results (YoY)
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What are penny stocks?
Penny stocks typically refer to stocks of small companies that trade at a relatively low price per share. These stocks are characterised by their low market capitalization, limited liquidity, and speculative nature. Penny stocks are often associated with early-stage companies, startups, or companies that are facing financial difficulties.
Investing in penny stocks can be highly speculative and risky due to their volatile nature. These stocks are prone to significant price fluctuations, and their low liquidity can make it challenging to buy or sell shares without impacting the stock price.
Additionally, penny stocks may lack the stringent regulatory oversight and reporting requirements that larger, more established companies adhere to, making them potentially susceptible to fraudulent activities or manipulation.
Read here: ₹19 to ₹246: Penny stock RVNL turns multibagger. Rises 1150% in five years
While some investors are attracted to penny stocks because of their low price and the potential for high returns, it’s essential to approach them with caution. Due diligence, thorough research, and risk management are crucial when considering investing in penny stocks to mitigate the inherent risks associated with this segment of the market.
Disclaimer: This story is for educational purposes only. Please speak to an investment advisor before making any investment decisions.
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Published: 22 Mar 2024, 12:08 PM IST
