Multibagger: Kaushalya Infrastructure Stock Soars 2537% in 5 Years – Is It the Right Time to Invest?

Once a penny stock, Kaushalya Infrastructure Development Corp has transformed into a multibagger, providing huge returns to its investors over the past five years. From July 2019 to now, the stock price has skyrocketed over 2537 percent, rising from ₹40 to ₹1,054.80.

This remarkable growth highlights the company’s strong performance and market confidence, making it a standout in the stock market. Early investors who recognized its potential have seen their investments grow significantly, showcasing the stock’s impressive turnaround and upward trajectory. These extraordinary gains reflect its past success and suggest it could be a high-return investment opportunity for the future.

Over the past three years, the stock has surged by an impressive 441 percent, climbing from ₹195.00 in July 2021 to its current levels.

In recent times, Kaushalya has continued to perform well, gaining almost 85 percent over the past year and 24 percent year-to-date in 2024. The stock has delivered positive returns in three out of the seven months so far this year. In July, it rallied over 44 percent following a 2 percent decline in June and a 3.6 percent fall in May. Earlier, it showed robust gains of 27 percent in April but declined 21.2 percent in March and 23 percent in February. Notably, January 2024 saw a significant increase of 16 percent in the stock’s value.

Moreover, the stock is just 2 percent away from its 52-week high of ₹1,079.00, hit in February 2024. It has shown strong resilience by surging over 129 percent from its 52-week low of ₹461.00, recorded in August 2023.

About the firm

Kaushalya Infrastructure Development Corporation Limited mainly focuses on infrastructure and real estate projects in India. It operates through two segments: Construction and Hotel. The company develops highways, bridges, industrial infrastructure, electrification and irrigation projects, and residential and commercial complexes. It also runs hotels, acquires, develops, and sells land, and trades school shoes and bags. The company was founded in 1992 and is based in Kolkata, India.

Earnings

In the March quarter (Q4FY24), Kaushalya Infra reported a standalone net profit of ₹12.18 crore compared to a loss of ₹1.43 crore in the year-ago period. Total income for the quarter was ₹16.5 crore, slightly down from ₹16.6 crore a year earlier, while total expenses decreased to ₹0.56 crore in Q4FY24 from ₹1.2 crore last year.

For the fiscal year 2023-24, the firm recorded a consolidated net profit of ₹10.8 crore, a significant turnaround from a net loss of ₹1.77 crore in FY23.

Brokerage views

Brokerage house ICICI Direct highlights several strengths of Kaushalya Infrastructure Development Corp, including its strong momentum with the stock price trading above its short, medium, and long-term moving averages. Additionally, the company has shown rising net cash flow and cash from operating activities, along with strong quarter-on-quarter EPS growth in recent results. These factors indicate a positive market sentiment and a bullish outlook for the firm, supported by its consistent financial performance and growth trajectory.

However, the firm’s only weakness, as per ICICI Direct, is its rising other income, and low operating income.

Investing in penny stocks

Investing in penny stocks can offer substantial returns due to their lower price points but also comes with significant risks. Penny stocks often face liquidity issues, leading to lower trading volumes compared to larger companies. Additionally, they may be subject to less stringent financial reporting requirements and oversight, which can increase the risk of market manipulation and fraudulent activities.

These factors contribute to greater volatility in penny stocks, elevating the risk for investors. To navigate these challenges effectively, investors must conduct thorough research and implement robust risk management strategies. By taking these precautions, investors can better manage the uncertainties associated with penny stocks and protect themselves against potential losses.