The Gujarat Toolroom share price has increased dramatically, yielding a 3,376% return in a mere two years. An investor who would have invested one lac rupees 24 months ago received a return of roughly 35 lacs from the penny stock. Gujarat Toolroom share price closed at ₹54.22 apiece on the BSE, and was locked at 5% upper circuit on Wednesday.
Due to their low price, lack of liquidity, and visibility, penny stocks—which normally trade in lower single digit numbers—are typically regarded as high-risk investments. These stocks could yield significant returns in the event that the underlying company experiences a significant transformation.
Gujarat Toolroom manufactures moulds for pharmaceutical, food and beverage, writing instrument, caps and closures, and oral hygiene products, according to information available on Trendlyne. Recently, it has forayed into the mining sector as well.
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With a number of significant advancements, Gujarat Toolroom has emerged as a noteworthy performer.
The company recently completed the acquisition of 6 hectares of mines in Zambia, which is a big step towards its goal of sustainable growth. Covering a total area of six hectares, the company expects to generate at least ₹700 crores in revenue annually when these mines begin operations in the next quarter, it said in a filing to the exchange on Tuesday.
“We believe this strategic move will not only enhance shareholder value but also solidify Gujarat Toolroom’s standing in the mining industry. We remain committed to upholding the highest standards of transparency and fostering open communication with our esteemed stakeholders,” the company said.
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Analysts state that Gujarat Toolroom’s market resilience is clear because the stock has been consistently trading above short-, medium-, and long-term moving averages and has generated high returns over the past five years. Furthermore, the company’s strong market position is made clear by its impressive 230% annual EPS growth and its prudent management of debt and profits.
Moreover, analysts believe that Gujarat Toolroom’s financial performance has been strong from a fundamental standpoint, with compounded profit growth of 2,444% and sales growth of 6,820% over the previous year. With a stock price CAGR of 60% over the last ten years and a remarkable 340% in the last year, the stock’s technical performance is equally impressive.
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Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decisions.
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Published: 04 Jan 2024, 08:43 AM IST
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