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Multibagger Stock Under ₹500 Turns ₹1 Lakh to ₹42.30 Lakh – Sharekhan, ICICI Direct Says BUY

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Multibagger Stock Under ₹500: Investing in smallcap stocks can be highly risky, but in the long term, some smallcap companies can give multibagger returns, as is the case with this smallcap multibagger stock trading below ₹500/-.

The value of an investment of ₹1 Lakh made on the listing day in this multibagger stock would now be ₹42.30 Lakh. And an investment of ₹1 Lakh made ten years ago would now be worth ₹19.49 Lakh. Below are the details about the multibagger stock available below 500 Rupees.

About Ramkrishna Forgings

Ramkrishna Forgings [NSE: RKFORGE] is a smallcap company with a market capitalization of ₹4,756 Crore. The company supplies forged metal products to brands like TATA Motors, Ashok Leyland, VE Commercial, Daimler within India, Volvo, Mack Trucks, Iveco, and Ford in the export markets.

With six manufacturing plants pan India, the company supplies its products to heavy machinery sectors like Automotive, Railways, Farm Equipment, Bearings, Oil & Gas, Power, Construction, Earth Moving, and Mining.

Ramkrishna Forgings Stock Split History

On 18th January 2022, the board of Ramkrishna Forgings announced a stock split on the ratio 1:5. It means One share of Ramkrishna Forgings will divide into Five shares.

The Pre-Split face value of Ramkrishna Forgings’ shares was ₹10/-, and the Post-Split face value will be ₹2/-. The stock started trading Ex-Split on 14th March 2022.

Ramkrishna Forgings Share Price History

According to NSE, the shares of Ramkrishna Forgings started trading in the Indian stock market on 5th May 2004. On the first day, the stock opened at ₹38.45/- and after plunging 0.39% with an intraday volume of 52,93,691 shares, the stock price of Ramkrishna Forgings closed the day at ₹38.30/-.

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Opening Day Trading Details Of Ramkrishna Forgings (Source: NSE)

On 20th April 2023, shares of Ramkrishna Forgings are trading under five hundred Rupees at ₹324.05/-. The stock opened the day at ₹309.10/-, and the closing price was ₹324.05/-, rising 5.42% on an intraday basis. The scrip registered a trading volume of 1.45 million shares.

Share Price Performance Of Ramkrishna Forgings

On the monthly chart, the share price of Ramkrishna Forgings is up by 19.37% on a closing basis. The stock appreciated from ₹271.45/- on 21st March 2023 to ₹324.05/- as of today.

On the half-yearly chart, the share price of this multibagger stock is up by 41.53% on a closing basis. The stock closed at ₹228.95/- on 21st October 2022.

On the yearly chart, the stock price of Ramkrishna Forgings is up by 68.55% on a closing basis. The stock price grew from ₹192.25/- on 21st April 2022 to ₹324.05/- as of 20th April 2023.

On the 3-year chart, the share price of Ramkrishna Forgings is up by 732.39% on a closing basis. On 21st April 2020, the Pre-Split closing price of the stock was ₹194.65/-, which translates to a Post-Split closing price of ₹38.93/-.

On the 5-year chart, the share price of Ramkrishna Forgings is up 41.53% on a closing basis. On 20th April 2018, the Pre-Split closing price of Ramkrishna Forgings’ shares was ₹833.45/-. Meaning the Post-Split closing price of the stock was ₹166.69/-.

On the All-Time chart, the stock price of Ramkrishna Forgings is up by 4,130.41% on a closing basis. In other words, the share price of this multibagger stock grew by 41.30 times.

On 5th May 2004, the stock price of Ramkrishna Forgings closed at a Pre-Split price of ₹38.30/-, translating to a Post-Split price of ₹7.66/-.

Investment Of ₹1 Lakh In Ramkrishna Forgings

An investment of ₹1 Lakh a year ago in Ramkrishna Forgings would have fetched 520 shares. As of 20th April 2023, the value of those 520 shares of Ramkrishna Forgings stands at ₹1,68,506/-.

If an investment of ₹1 Lakh was made three years ago in shares of Ramkrishna Forgings, it would have fetched 513 shares. And after the Stock Split in the ratio 1:5, 513 shares of Ramkrishna Forgings would have become 2,565 shares.

As of 20th April 2023, those 2,565 shares would be worth ₹8,31,188.25/-.

If we prolong the investment duration to five years, we can see that an investment of ₹1 Lakh in Ramkrishna Forgings would have fetched 119 shares.

Post the Ex-Split date on 14th March 2022, 119 shares of Ramkrishna Forgings would have become 595 shares. And as of 20th April 2023, the value of those 595 shares would be ₹1,92,809.75/-.

An investment of ₹1 Lakh in Ramkrishna Forgings ten years ago would have fetched 1,203 shares. After the stock split, 1,203 shares would have become 6,015 shares of the company.

And after ten years, the value of those 6,015 shares of Ramkrishna Forgings would have inflated to ₹19,49,160.75/-.

If any lucky investor invested ₹1 Lakh in Ramkrishna Forgings on the listing date, it would have fetched 2,610 shares. And post the stock split on 14th March 2022 in the ratio 1:5, 2,610 shares of Ramkrishna Forgings would have become 13,050 shares.

And after 18 years and 11 months, on 20th April 2023, the value of 13,050 shares of Ramkrishna Forgings would have been ₹42,28,852.50/-.

The above calculation shows the power of compounding and long-term investment.

Ramkrishna Forgings Dividend News

On 9th January 2023, the company announced an interim dividend of 50 Paise per share for its shareholders. The stock started trading Ex-Dividend Date on 31st January 2023.

In a recent corporate disclosure to NSE, Ramkrishna Forgings stated that the company had scheduled a board of directors meeting on 28th April 2023 to consider and approve an interim dividend for FY 22-23.

Should You Invest In Ramkrishna Forgings?

According to the latest Research Report from Sharekhan, the shares of Ramkrishna Forgings have a BUY rating, and one should buy the stock for a target price of ₹329/-.

In the broker research report, Sharekhan States – “We maintain our Buy rating on Ramakrishna Forgings Limited (RKFL) with a revised PT of Rs.329, led by strong revenue growth, improving margin profile, and attractive valuations.”

The broker also states – “The stock trades at attractive valuations of 9.7x P/E multiple and 5.3x EV/EBITDA multiple on FY2025E, respectively.”

The two key risks Sharekhan mentioned for Ramkrishna Forgings are – Cyclicality of the sector and Forex fluctuation.

Another broker research report from ICICI Direct gave a BUY rating to Ramkrishna Forgings. ICICI Direct estimates the stock of Ramkrishna Forgings to reach its target price of ₹335/- within 12 months.

In the research report, the broker said – “We retain BUY amid strong order book in the export market, unchanged vision to grow sales at ~20% in next three years, sustainable margin profile of ~22% and RoCE accretive organic, inorganic expansion plans.”

To justify the target price and valuation, ICICI Direct said – “Introducing FY25E, we now value RKF at ₹ 335 i.e. 14x P/E on FY24E-25E average EPS of ₹ 23.8 amid ~20% return ratio profile.”

The two primary risks ICICI Direct mentioned for Ramkrishna Forgings are – Slowdown in export markets and Lower than anticipated profit margin.

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Written by Sayantan Chakraborty

I have been investing in the Indian stock market for more than 11 years. I have invested in the Indian Stock Market via Mutual Funds, ETFs, and Direct Stocks. I have seen multiple markets cycle, and from my experience, all I can say is persistence is the key to success in the Indian Stock Market as an investor.
I also love reading financial books and company results and reports.
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