Rs 4 to Rs 176: This penny stock turned into a multibagger in one year

Stock of Digjam has delivered 4,412 per cent returns in one year. The penny stock, which closed at Rs 3.90 on December 22, 2020 rose to an all-time high of Rs 176 on the Bombay Stock Exchange (BSE) today. An amount of Rs 1 lakh invested in the shares of Digjam a year ago would have turned into Rs 45.12 lakh today.

In comparison, Sensex has risen 23.22 per cent during the period. The share ended 5% higher at Rs 176 today, against the previous close of Rs 167.65 on BSE.

The stock traded 4.98 per cent higher on BSE through the session. Market cap of the textile manufacturer rose to Rs 35.20 crore. Digjam share has gained 4,192 per cent since the beginning of this year and climbed 191.15 per cent in one month. The mid-cap stock has rallied 177.38% in the last 21 days.

The share opened with a gain of 4.98% today.

Digjam share stands higher than 5 day, 20 day, 50 day, 100 day and 200 day moving averages. Total 2,709 shares changed hands amounting to a turnover of Rs 4.77 lakh on BSE.

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The share of the textile firm has outperformed its peers in the last one year.

While Welspun India stock has risen 103.86 per cent, stock of another competitor Garware Tech has gained 55.25 per cent in one year. Share of TCNS Clothing Co. has climbed 79.74 per cent and Jindal Worldwide stock managed to rally 313.48% in a year.

Promoters did not hold any stake at the end of September quarter which is a key factor one should consider before dealing in the stock.

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Public shareholders owned 41,058 shares or 100% stake at the end of September quarter. 40,165 public shareholders with individual capital up to Rs 2 lakh owned 20 lakh shares of the firm. One public shareholder held capital above Rs 2 lakh in the form of 46,860 shares or 2.34% stake at the end of September quarter.

13 financial institutions and banks owned 12.43% stake or 2.48 lakh shares of the firm. Life Insurance Corporation of India held 1.88% stake or 37,502 shares of the firm at the end of September quarter.

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The stock is included under the second stage of additional surveillance measures (ASM) on BSE. Stocks are placed in the ASM category which see huge and sudden price fluctuations without any logical factor.

The shortlisting is based on the following parameters: high low price variation, client concentration, number of price band hits, price variation between closings and P/E ratio.

The phenomenal rise in the stock of Digjam is in line with the financial performance of the firm. In the September quarter, net profit zoomed 370.29% to Rs 7.46 crore against a loss of Rs 2.76 crore for the quarter ended September 2020.

Net sales rose 2,234% to Rs 8.87 crore in Q2 against Rs 0.38 crore for the quarter ended September 2020. Operating profit zoomed 373.95% to Rs 5.89 crore in Q2 against a loss of Rs 2.15 crore in the corresponding quarter of previous fiscal.

On a quarter on quarter basis, net profit rose 282% from a loss of Rs 4.09 crore. Net sales climbed 139.73% from Rs 3.70 crore in the June quarter of this fiscal.

On an annual basis, profit rose 150.85% to Rs 8.94 crore for the March 2021 fiscal against loss of Rs 17.58 crore in March 2020 fiscal. Net sales zoomed 650.62% to Rs 6.08 crore in the last fiscal against Rs 0.81 crore sales for fiscal ended March 2020.

Digjam is a leading Indian textile company, manufacturer of fabrics for suiting and ready-to-wear clothing under its own brands.

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