Rs 65 to Rs 1,451: This stock turned into a multibagger in five years, more upside ahead?

Shares of Pondy Oxides have delivered multibagger returns to investors in the last five years. The scrap recycling stock, which closed at Rs 65 on January 8, 2021 rose to Rs 1451 in the current session, clocking 2100% returns during the period. In comparison, Sensex has risen 72.61% in three years.

Earlier, the stock opened lower at Rs 1449.95 today against the previous close of Rs 1450.05 on BSE. Later, the stock closed 3.73% lower at Rs 1396. The stock has risen 72.39% in a year and gained 53.11% in six months.

Market cap of the firm rose to Rs 4408 crore. Total 3918 shares changed hands amounting to a turnover of Rs 56.17 lakh on BSE. The stock hit a 52 week high of Rs 1578.10 on January 5 this year. 

In terms of technicals, the relative strength index (RSI) of Pondy Oxides stands at 56.3, signaling the stock is trading neither in the oversold nor in the overbought territory. Pondy Oxides shares stand higher than the 20 day 30 day, 50 day, 100 day, 150 day, 200 day but lower than the 5 day and 10 day moving averages.

B&K Securities has a price target of Rs 1538 on the stock. The brokerage has initiated coverage on the stock with a Hold rating and a target price of Rs 1,538 (valued at 23x of FY28E EPS). 

"We expect 34%/52% Revenue/PAT CAGR over FY25-28E with consolidated EBITDA margins expanding from 5.1% in FY25 to 6.8% in FY28 led by commissioning of new plant at TKD with large smelting units and automated refining units, operational efficiencies at existing plants, increasing value added products in lead recycling and copper recycling verticals. RoCE/RoE are expected to be at 23.2%/20.7%," said the brokerage. 

Pondy Oxides & Chemicals is engaged in converting scraps of various forms of Lead, Alumnium and Copper into Lead Metal, Aluminium Metal, Copper and its Alloys.