Multibagger penny stock under Rs 80 gained over 14 per cent as OMCs announced additional incentives on maize-based ethanol; FIIs increase stake!

The stock gave multibagger returns of 150 per cent in 1 year, 600 per cent in 3 years and a whopping 4,000 per cent in a decade.

Today, shares of BCL Industries Ltd gained 14.3 per cent to an intraday high of Rs 78 per share from its previous closing of Rs 68.25 per share. The stock’s 52-week high is Rs 79.14 and its 52-week low is Rs 30. The shares of the company saw a spurt in volume by more than 9 times on BSE.

BCL Industries' stock price shot up like a rocket after a sweet announcement from oil companies on Thursday. They're offering a bonus of Rs 5.79 per litre for ethanol made from corn, and BCL Industries is a major player in that game. This extra incentive could be the fuel that propels BCL Industries even higher in the months to come.

Earlier, to adjust for a recent stock split, the company converted 50,000 outstanding warrants into 5,00,000 shares, while offering remaining warrant holders a discounted conversion option by paying 75 per cent of the original price within a set timeframe. This manoeuvre bolsters the company's share capital with new shares holding equal rights to existing ones.

Notably, two major foreign institutional investors, Elara India Opportunities Fund and Vespera Fund Limited, contributed a combined Rs 27.4 crore through warrant allocations, with Elara acquiring 95 lakh warrants (worth Rs 25.65 crore) and Vespera acquiring 6.5 lakh warrants (worth Rs 1.75 crore).

Additionally, the company and its subsidiary Svaksha Distillery Limited secured ethanol supply contracts worth Rs 561 crore from leading Oil Marketing Companies (OMCs) - BPCL, IOCL, HPCL, and RIL. The total volume committed amounts to a staggering 8.20 crore litres.

According to Quarterly Results, the net sales increased by 6.2 per cent to Rs 480.71 crore and operating profit increased by 467.65 per cent to Rs 48.9 crore in Q2FY24 compared to Q2FY23. The company reported a net profit of Rs 19.67 crore in Q2FY24 compared to Rs 0.82 crore in Q2FY23, an increase of 2,499 per cent.

The net sales increased by 9.7 per cent to Rs 909.38 crore, operating profit increased by 124.3 per cent to Rs 90.16 crore and net profit increased by 132.8 per cent to Rs 39.42 crore in H1FY24 compared to H1FY23

BCL Industries Ltd Limited is a part of the Mittal group with a market cap of over Rs 1,900 crore. In September 2023, FIIs bought 4,21,073 shares or 1.66 per cent stake in this multibagger stock and in the upcoming quarter, the FIIs stake percentage will be increasing.

The shares of the company have a PE of 2.30x whereas the sectoral PE is 36.7x with a ROE of 16.1 per cent. The stock gave multibagger returns of 150 per cent in 1 year, 600 per cent in 3 years and a whopping 4,000 per cent in a decade. Investors should keep an eye on this Small-Cap stock.

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