Dolly Khanna's single-digit PE micro-cap stock reports a 7000 per cent profit jump!

Rajshree Sugar & Chemical: A Hidden Gem or a Risky Gamble?

Rajshree Sugar & Chemical Stock Locked in Upper Circuit on Friday Amid High Expectations of Profit and Revenue Growth. The Company's Market Cap Stood at Rs. 165.78 Crores.

Rajshree Sugar & Chemical reported its quarter 2 unaudited financial results on November 4th, 2023. Revenue from operations grew 15.09 per cent from Rs. 185.05 crores to Rs. 212.98 crores year on year, with Profit after tax seeing a massive increase of 7174.96 per cent from Rs. 0.23 crore to Rs. 17.17 crores in profit. Earnings per share of the company is Rs. 5.18 per share, up from Rs. 2.58 per share in the last quarter. When looking at the quarter-on-quarter performance, there is a 6.55 per cent drop in operating revenue and a 101.27 per cent surge in profit after tax. There are significant improvements in the cost of goods, and the company has effectively reduced its other expenses.

The stock is currently trading at Rs. 50, signifying that it is a penny stock with a low price-to-earnings ratio, which stands at 5.99, indicating undervaluation. This is further reflected by the price-to-book value ratio, trading at 0.60, compared to its peers, making it an attractive prospect. However, there is more to know about this stock, as Dolly Khanna, the ace investor in Chennai, has invested in this company with around a 1.05 per cent stake, suggesting that the stock may have great potential ahead. Looking at the company's working capital snapshot, it is clear that debtor days have improved from 24.0 to 17.4 days.

The stock has not performed well in the short-term, adding only 43.26 per cent to its owners' wealth. The following chart of Rajshree Sugar & Chemical shows a strong resistance line, which is hindering the stock from providing multi-fold returns to its shareholders. If the price breaks out at this level, the stock price may double or even triple from the current level.

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