Rs 10,000 investment in this multibagger smallcap stock turned to Rs 10 lakh in just 10 years

In the last 3 years, the stock has surged 2467% and gave returns of 1102% in the last five years.

GRM Overseas, a smallcap company with a market capitalization of about Rs 1,032 crore, is engaged in the business of milling, processing and marketing of branded and non-branded basmati rice in the domestic and overseas market.

It has an EPS of 8.93 on a trailing twelve month (TTM) basis and the stock is currently trading at a PE of 19.28.

According to the latest shareholding pattern available with the exchanges, promoters own majority of the stake at 71.72%, while the rest of 28.28% lies with the public shareholders.

Among the public shareholders, mutual funds don’t have any stake in the company, while foreign investors have a meagre 0.07%. Retail investors have a combined holding of 10.34% in the company.

GRM Overseas has seen its sales grow manifold from just Rs 270 crore in FY13 to Rs 1,379 crore in FY23. Meanwhile, profit after tax (PAT) too surged from just Rs 2.78 crore to nearly Rs 63 crore in the same period.For the quarter ended March, total revenues grew by 16% YoY, to Rs 438 crore as compared to Rs 377 crore in Q4FY22. PAT stood at Rs 11.3 crore.

Technical outlook – What should investors do?

Analysts say the stock is currently displaying a bearish trend on the charts and advise investors either to hold short positions or avoid buying.

“The stock is underperforming benchmark indices, and momentum indicators are confirming the downtrend. These combined factors suggest that GRM Overseas is in a precarious position. Holding short positions with a stop loss of 193 is a prudent strategy,” said Mileen Vasudeo, Sr Technical Analyst, Arihant Capital.

“Downside targets could potentially be at 160–146 levels. However, investors should exercise caution, conduct thorough research, and consider their risk tolerance before making any investment decisions,” Vasudeo said.

“The primary structure of the counter is following the downtrend in the longer time frame. The overall structure is distorted as it trades below its all-important moving averages. However, it is trying to form a base at around Rs 164 levels. On the upside, 200 is an immediate susceptible area, but before that, the counter has to protect the lower level of Rs 164,” said Pravesh Gour, Senior Technical Analyst, Swastika Investmart.

With data inputs from Ritesh Presswala

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)