High ROE & ROCE multibagger penny stock below Rs 30 and FIIs increase stake: This micro-cap textile scrip hit 20 per cent upper circuit after 1:3 bonus shares!

The stock gave multibagger returns of 460 per cent in just 2 years and a whopping 1,775 per cent in 3 years.

On Friday, one of the Top Gainers on BSE, shares of Axita Cotton Ltd hit 20 per cent upper circuit to Rs 28.69 per share from its previous closing of Rs 23.91. At the closing bell, shares of the company were trading at Rs 27.74 per share. The stock’s 52-week high is Rs 62.25 and its 52-week low is Rs 18.53 per share.

Axita Cotton Limited is engaged in the business of manufacturing, processing and finishing cotton bales and cotton seeds. The company's main business is the ginning and pressing of seed cotton (Kapas) on a work basis and the production of cotton bales and cotton seeds. The company has a market cap of over Rs 700 crore.

On Friday, December 22, 2023, the shares of the company ex-traded bonus issue of shares in the ratio of 1:3 [i.e., 1 bonus equity share of Rs 1 each for every 3 fully paid-up equity shares held as on record date subject to the approval of shareholder.

Earlier, the company secured new orders from multiple vendors in the industry, obtaining various contracts and awards totalling Rs 89.22 crore in the Indian Raw Cotton categories. Under the terms of the agreement, Axita Cotton Limited is set to deliver cotton bales over a specified period. The sales orders include Rs 26.60 crore from A B & Co. (Order No. 1), Rs 18.72 crore from HSC Commodities Private Limited (Order No. 2), Rs 21.77 crore from P D Commodities (Order No. 3), and Rs 22.13 crore from Shree Shiddhnath Cottex Pvt Ltd (Order No. 4).

According to the Quarterly Results, the net sales increased by 324.23 per cent to Rs 388.78 crore and the net profit skyrocketed by 184.07 per cent to Rs 6.51 crore in Q2FY24 compared to Q2FY23. According to the half-yearly results, the net sales increased by 108.13 per cent to Rs 616.64 crore and the net profit increased by 81.74 per cent to Rs 12.26 crore in H1FY24 compared to H1FY23. In its annual results, the net sales decreased by 32.42 per cent to Rs 552.6 crore and net profit increased by 11 per cent to Rs 17.04 crore in FY23 over FY22.

The stock has an ROE of 38.4 per cent and an ROCE of 49.1 per cent. As of September 2023, FIIs bought 37,19,299 shares or 1.89 per cent stake in this company (Currently, FIIs own a total of 5.32 per cent stake).

The stock gave multibagger returns of 460 per cent in just 2 years and a whopping 1,775 per cent in 3 years. Investors should keep an eye on this micro-cap stock.

Disclaimer: The article is for informational purposes only and not investment advice.