1,00,000% rally in 15 years! Here’s how this stock turned Rs 10,000 to Rs 1 crore

A Gujarat-based manufacturer of synthetic resin adhesives has changed the fortunes of many investors who continued to stick with the company on Dalal Street despite its ups and downs during the past 15 years. Shares of the company have soared 1,25,539 per cent to Rs 1,114 on March 17, 2023 from Rs 0.89 in March 2008. The stock was at Rs 3.68 in March 2013. The company is Jyoti Resins & Adhesives whose products come under the brand name EURO 7000.

The rise in share price indicates that an investment of Rs 10,000 in 2008 would have grown to over Rs 1.25 crore at present. Data showed that consistent growth in earnings and a solid balance sheet have worked in favour of the debt-free company in the domestic equity market. Gross sales of the company have grown at a compounded annual growth rate of more than 35 per cent to Rs 181.96 crore in FY22 against Rs 2.04 crore in FY08. Likewise, net profit grew more than 50 per cent CAGR to Rs 19.76 crore from just Rs 0.05 crore during the same period.

For the nine-month ended December 2022, the company reported 57.58 per cent YoY growth in gross sales at Rs 196.18 crore. On the other hand, net profit jumped 133.86 per cent to Rs 30.04 crore during the same period.

“At present, the company is operating at 50-60 per cent capacity utilisation (at gross production levels) which is expected to move up with increasing penetration and demand for our product,” Jyoti Resins & Adhesives said in its latest investor presentation adding over the last 7 years, it has grown at CAGR of 38 per cent, 73 per cent and 115 per cent on revenue, EBITDA and PAT, respectively.

“We are targeting over 25-30 per cent CAGR for revenues over the next 3-4 years,” the company said.

Promoters held a 50.82 per cent stake in the company as of December 2022, while the public had a 49.18 per cent stake. The company has been maintaining a return on equity (RoE) and return on capital employed (RoCE) of over 50 per cent and 70 per cent since FY20.

The company believes that low-cost manufacturing, asset-light business model, robust network, diversified product portfolio and carpenter reward model are among its key competitive edge. Overall, the company has a presence in 13 states and operates through 50 distributors for smaller cities and 28 branches for bigger cities. It is selling to 10,000 active retailers and working with 3 lakh carpenters, 300 sales executives and business development executives.

Among the other major gainers include Relaxo Footwears, whose stock gained 38,815 per cent in the last 15 years. It was followed by Safari Industries (India) (up 35,129 per cent), Symphony (up 28,840 per cent), Vinati Organics (up 23,835 per cent), Tasty Bite Eatables (up 21,564 per cent), Astral (up 20214 per cent), Poly Medicure (up 18,377 per cent), Ajanta Pharma (up 17,855 per cent), Arman Financial Services (up 17,819 per cent), Bajaj Finance (up 17,790 per cent), Avanti Feeds (up 17,492 per cent), Stylam Industries (up 16,831 per cent) and Deepak Nitrite (up 16,256 per cent).

Also read: HUL, Bajaj Finance, BPCL: How should you trade these stocks amid volatility

Also read: GAIL, HUDCO, Sun TV, NALCO shares to go ex-dividend today; Hind Zinc, SBI Card to consider dividend payout