Multibagger penny stock below Rs 40: This small-cap textile company reports a 184 per cent jump in net profit and announces stellar dividend!

The stock gave multibagger returns of 590 per cent in just 2 years whereas BSE Sensex Index is up by 8 per cent.

On Monday, shares of Axita Cotton Ltd hit 5 per cent upper circuit to Rs 31.08 per share from its previous closing of Rs 29.60. The stock has a 52-week high of Rs 83 and a 52-week low of Rs 24.70. The shares of the company a spurt in volume by more than 4 times on BSE. At 02:00 pm, shares of the company were trading at Rs 28.92 per share, down 2.3 per cent.

The sudden rise in the stock price was due to the company announced stellar Quarterly Results, half-yearly results and dividend. Here are the details:

According to the quarterly results, the net sales increased by 324.23 per cent to Rs 388.78 crore and the net profit skyrocket 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 Board of Directors had declared an interim dividend of Rs 0.10 per equity share (representing 10 per cent) of a face value of Rs 1 each fully paid up for the financial year 2023-24 and the said interim dividend will be paid on or before December 03, 2023.

Axita Cotton Limited is engaged in the business of manufacturing, processing and finishing cotton bales and cotton seeds. The company's main business is ginning and pressing of seed cotton (Kapas) on job work basis and production of cotton bales and cotton seeds. It also trades Kapas, cotton bales and cotton seeds.

The stock has a ROE of 38.4 per cent and a ROCE of 49.1 per cent. As of September 2023, FIIs have increased their stake from 3.43 per cent to 5.32 per cent.

The stock gave multibagger returns of 590 per cent in just 2 years whereas BSE Sensex Index is up by 8 per cent. Investors should keep an eye on this micro-cap stock.

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