Hardwyn India, a small-cap stock, has seen a massive increase of 6,592% over the last five years. In the past three years, starting from June 2021 when it traded at ₹3.17, the stock has soared by 955%.
However, the stock has experienced some declines recently. Over the last year, it has dropped by 37% and is down 18% so far this year. The stock has given negative returns in four out of the six months so far. It rose by 16% in June, ending a streak of four consecutive months of losses since February 2024. During this period, it fell 35%, including a 5% drop in May, 9% in April, 24% in March, and 1% in February. In January 2024, it went up by 9%.
The stock reached a record high of ₹51.77 on January 15, 2024, and a 52-week low of ₹26.10 on June 5, 2024. Currently trading at ₹33.5, it is 35% below its peak but has risen more than 28% from its 52-week low.
About the Company
Hardwyn India Limited makes and sells architectural hardware and glass fittings for homes and businesses under the Hardwyn brand in India. Their products include door closers, floor springs, glass patch fittings, shower fittings, plastic profiles, handles, locks, stainless steel railings, brass and zinc handles, furniture locks, telescopic channels, electronic safes, bathroom accessories, and aluminum profile products. The company, originally known as Garv Industries Limited, changed its name to Hardwyn India Limited in January 2020. Founded in 1965, it is based in New Delhi, India.
Earnings
In the March quarter (Q4FY24), Hardwyn India’s net profit fell by 12% year-on-year to ₹3.29 crore from ₹3.73 crore in the same quarter last year. It also dropped from ₹4.1 crore in the December quarter.
Despite this, the company’s total income rose by 21% year-on-year to ₹37 crore in the March quarter, compared to ₹30.5 crore in the same period last year. In the previous quarter, its total income was ₹35.1 crore.
For the full financial year FY24, the company’s net profit increased by 8% to ₹9.75 crore from ₹9.03 crore in FY23. Its total income also grew by 8% to ₹136 crore in FY24 from ₹125.77 crore in FY23.
Brokerage View
ICICI Direct highlighted several strengths of Hardwyn India. The company operates with minimal debt, ensuring financial stability and flexibility. Over the past two years, Hardwyn India has consistently improved its annual net profits, reflecting effective management and increased profitability. Another positive is the absence of any promoter pledge, showing strong corporate governance and alignment of interests between stakeholders and shareholders. These factors strengthen Hardwyn India’s market position and provide a solid foundation for potential growth.
However, ICICI Direct noted a weakness: declining net cash flow. The company is struggling to generate net cash.
Investing in small-cap stocks like Hardwyn India offers potential for significant gains due to their affordability. However, this comes with risks. Small-cap stocks often have limited liquidity, leading to fewer transactions compared to larger firms. They may also lack strict financial reporting and oversight, making them vulnerable to price manipulation and fraud.
Due to these issues, small-cap stocks typically show higher volatility, increasing investor risks. Therefore, thorough research and sound risk management strategies are crucial to navigating the uncertainties of small-cap stocks and minimizing potential losses.
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