Re 0 sales, 230% stock return! This microcap stock turns multibagger in 2024

An unknown BSE-listed stock delivered over 200 per cent return in 2024, even as the garments & apparels player reported nil sales, along with losses, in the trailing 12 months or four quarters, data compiled by corporate database Ace Equity suggests. This is Popees Cares Ltd.

Formerly known as Archana Software, this stock climbed 229.61 per cent in 2024 to Rs 189 level from Rs 57.34 level at the end of 2023. This is despite a 25 per cent drop on the counter from a recent high of Rs 250.75.

Popees Cares reported a loss of Rs 8.97 lakh in the September quarter, a loss of Rs 5.10 lakh in June quarter and a loss of Rs 2.44 crore for the year-ended March 31, 2024. The company reported sales of Rs 14 lakh in the December quarter of 2020. Since then, it either reported nil sales or its quarterly sales data was not available with AceEquity.

The stock comes under Graded Surveillance Measures (GSM) stage 2. GSM measures are applied on securities, which witness an abnormal price rise not commensurate with financial health and fundamentals like earnings, book value, fixed assets, net worth or P/E multiple. The main objective of such measures are to alert and advice investors to be extra cautious while dealing in such securities.

In October 2023, the BSE-listed company was substantially acquired by the current acquirer & promoter. On April 5 this year, the name of the said company was changed to Popees Cares Ltd.

The initial share capital of the company was Rs 6.04 crore. Since the accumulated losses up to March 31, 2024, were at Rs 6.27 crore, the equity balance as at March 31, 2024 was reduced to minus Rs 22.82 lakh.

With the aim to enhance its financial flexibility and create opportunities for future growth and investment ,the company management decided to bring in additional share capital to the extent of Rs 12.80 crore by issuing fully convertible warrants.

A resolution was passed in January this year and the company is awaiting for the approval of BSE in this regard. In its Q2 earnings report, Popees Cares said the accumulated losses till September 30 reached Rs 6.40 crore and the equity balance got further reduced to minus Rs 36.47 lakhs.

"As the company is going to get an additional Capital amount to the extent of Rs 1280.00 Lacs in one or more tranches during this financial year and there after, through the said Share Warrants issues it will enable the company to pursue strategic initiatives ,funding new projects and start their commercial operations in due course shortly and resultantly the company will start to make taxable profit in coming periods," it said.

It hoped it will be in a position to recover all their losses made till September 30, 2024.