IEL Jumps 4900% in 4 Years, But Is It Time to Invest?

Indian company IEL has been a hot topic among investors, with its stock shooting up an incredible 4900% in just four years, from ₹0.14 in May 2020 to ₹7 today.

But, it’s not all sunshine and rainbows. Over the past year and especially in 2024, IEL has taken a nosedive. It’s dropped over 52% in the last year and over 32% in 2024 alone. And to add to that, it’s been a rough ride for investors this year, with the stock seeing negative returns every single month.

The recent downturn means the stock is now a whopping 66% lower than its peak of ₹20.59 in June 2023. While it’s only up 5% from its lowest point in the past year, which was ₹6.69 in April 2024.

Despite these recent struggles, IEL has still delivered impressive returns over the years. It’s given investors returns of over 566% in 3 years, 1196% in 5 years, and a staggering 2592% in a decade.

Company Overview

IEL Ltd, founded in 1956, started with a focus on manufacturing but switched gears to trading chemicals and offering related services. The company has plans to expand its business both domestically and internationally, but it’s facing some hurdles to growth.

In terms of earnings, IEL has shown some improvement. In the last quarter (Q4FY24), its net sales shot up by a whopping 781.5%, reaching ₹9.12 crore compared to ₹1.03 crore in the same quarter the previous year. And while the annual net sales also saw an increase, going up by 55.9% to ₹17.26 crore in FY24, the net profit for the year actually decreased.

Investment Considerations

Brokerage firm ICICI Direct sees some positive signs for IEL, like consistent revenue growth and improving profits over the past two quarters. They also note that the company’s promoters haven’t pledged any of their shares, which is seen as a good sign for financial health.

However, there are some concerns too, such as a decrease in promoter holding and negative profit growth.

For those who might not know, penny stocks are shares of small companies that trade at a low price, usually below ₹10 per share. They’re known for being highly volatile and risky but can offer the chance for high returns if things go well.