Don’t judge the book by its cover. This saying might just well apply to these five smallcap stocks that were beaten black and blue in the last five years.
Lady Luck is now smiling as the scrips in question are on the way up after a massive wealth erosion. The list includes stocks such as Easun Reyrolle, Adhunik Metaliks, Flexituff Ventures International, Esaar (India) and Alchemist.
In fact, the list features some favourites of India’s biggest investor Life Insurance Corporation (LIC), mutual fund houses as well as foreign institutional investors.
With a rally of 30 per cent so far this year, Easun Reyrolle sits on the top of the short-listed stocks. The stock tanked 76 per cent, 4 per cent, 52 per cent, 8 per cent and 22 per cent in 2018, 2017, 2016, 2015 and 2014, respectively.
Both domestic as well as foreign investors held over 1 per cent stake in the company as of September 30, 2018. Holdings of ICICI Prudential InfrastructureNSE -1.80 % Fund and HDFC Infrastructure Fund read 3.27 per cent and 1.42 per cent, respectively, with Eastspring Investment India Infrastructure Equity Open as the foreign portfolio investor. Shareholding figures for the December quarter are yet to be announced by the company.
Easun Reyrolle, which is into electrical power management, has been reporting losses for the past eight years. It suffered a net loss of Rs 15.60 crore in FY18 on Rs 74.20 crore of net sales.
Adhunik Metaliks, which deals in manufacturing and sale of steel — both alloy and non-alloy — came in as the next top grosser in returns tally. The scrip rallied 23 per cent to Rs 2.70 on a month-to-date basis till January 10. The stock was down 65 per cent, 10 per cent, 55 per cent, 27 per cent and 41 per cent in 2018, 2017, 2016, 2015 and 2014, respectively.
Among the top shareholders, LIC of India Profit Plus Growth Fund was holding 3.33 per cent stake in the company as of September 30 last year.
The steel maker reported a net loss of Rs 1016.65 crore in FY18 against net loss of Rs 1480.10 core a year ago. It also had to run up a net loss of Rs 647 crore and 483.60 crore in FY16 and FY15, respectively.
A similar case plays out for Flexituff Ventures International, which has rallied 18 per cent this month so far after falling 2.50-60 per cent during 2014-18.
Flexituff Ventures International — formerly known as Flexituff InternationalNSE 4.95 % — is engaged in the business of technical textiles. A multi-product multi-market and multi-location company headquartered in PithampurNSE 0.00 % Madhya Pradesh, it’s 100 per cent vertically integrated and caters to demand for technical, construction, packaging, transport, industrial and agro textiles, among others.
The scrip hit an upper circuit of 5 per cent on January 11. LIC was holding 8 per cent stake in the company at the end of the September quarter while General Insurance Corporation had an exposure of 3.22 per cent.
Flexituff Ventures International reported 514.30 per cent year-on-year rise in net profit at Rs 8.60 crore for the quarter to December 2018. It had posted a net profit of Rs 1.40 crore in the same quarter last year. However, the company saw a net loss of Rs 3.60 crore for the year ended March 2018 against net profit of Rs 4.50 crore a year earlier.
Esaar (India) (up 13 per cent) and Alchemist (up 5.26 per cent) also moved higher in January till date. Shares of Esaar dipped 85 per cent, 50 per cent, 50 per cent, 50 per cent and 84 per cent in 2018, 2017, 2016, 2015 and 2014, respectively. On the other hand, Alchemist slipped a minimum 8 per cent in 2015 and maximum 82 per cent in 2018 during the past five years.
Alchemist has been reporting losses for the past four years, logging a net loss of Rs 16.80 crore, Rs 107 crore, and Rs 48 crore in FY18, FY17 and FY16, respectively.
Among other stocks, Educomp SolutionsNSE 1.89 %, Nyssa Corporation, and Orchid Pharma also moved marginally up by 0.60-2 per cent in January till date after a wealth erosion during the past five years.
LIC was holding over 2 per cent stake in Orchid Pharma as of September-end of 2018