- Magellanic Cloud has proven to be an exceptional long-term investment for its investors.
- The stock has given multifold returns, skyrocketing 8166 percent in the last five years.
- “The stock has performed surprisingly well, rallying 4078 percent in the last 3 years,” according to market analysts.
Discover why Magellanic Cloud is a top-performing stock with exceptional returns and what it means for future investors.
Magellanic Cloud’s Impressive Performance
Magellanic Cloud has shown remarkable growth over the past five years, with its stock price increasing from ₹7.44 in May 2019 to ₹615 currently. This represents an astounding 8166 percent increase. Over the last three years, the stock has continued to perform well, rallying 4078 percent from ₹14.72 in May 2021. In the past year alone, it has soared 201 percent and advanced 34 percent in 2024 YTD.
Recent Performance and Trends
This year, the stock has given positive returns in four out of the five months to date. It is up around 1 percent in May following a 28 percent surge in April, although it fell 22.6 percent in March. The stock was positive in the first two months of this year, gaining 15.6 percent in February and 16 percent in January 2024. Currently, it is just 8.5 percent away from its record high of ₹672.05, hit on May 9, 2024, and has jumped 203 percent from its 52-week low of ₹203.05, hit on May 30, 2023.
ASM LT: Stage 2 Status
It is important to note that the stock is currently trading under ASM LT: Stage 2. ASM LT Stage 2 refers to a regulatory framework implemented by the Securities and Exchange Board of India (SEBI) and the stock exchanges to monitor and manage trading activities. This stage indicates that the stock has exhibited certain unusual trading patterns or volatility that warrant closer surveillance.
Implications of ASM Stage 2
ASM Stage 2 is a more stringent level of monitoring than ASM Stage 1. When a stock enters ASM Stage 2, it indicates potential market manipulation or speculative activity. Stocks in this stage are subjected to higher margin requirements, reducing speculative trading. There may also be trading restrictions, such as limitations on intraday trading or compulsory delivery-based trading, to curb excessive volatility and speculative trades. Additionally, stocks in this stage may be subjected to narrower price bands, restricting the extent to which their price can move within a single trading session to prevent large, sudden price movements that could destabilize the market.
About Magellanic Cloud
Magellanic Cloud Limited, an IT service organization, provides software solutions for mobile and desktop. The company offers digital transformation, product engineering, product development, quality assurance, DevOps, data analytics, multi-cloud and DevOps automation, process automation, drone solutions, e-security and surveillance, enterprise security, and human capital solutions. In addition, it provides IT consulting services. The company was formerly known as South India Projects Limited and is based in Hyderabad, India.
Recent Earnings
In the March quarter (Q4FY24), Magellanic Cloud reported a multifold rise in its consolidated net profit at ₹3.97 crore versus ₹1.44 crore in the year-ago period. However, on a sequential basis, the profit fell from ₹5.2 crore in the December 2023 quarter. Its revenue for the quarter under review declined 26 percent to ₹15.42 crore as against ₹20.8 crore in the year-ago period. On a QoQ basis, the revenue fell 18 percent from ₹18.77 crore in the December quarter.
Brokerage View
Brokerage house ICICI Direct has highlighted several strengths for Magellanic Cloud, including high trailing twelve months (TTM) EPS growth, growth in net profit accompanied by increasing profit margins on a quarter-over-quarter (QoQ) basis, and growth in quarterly net profit with rising profit margins year-over-year (YoY). However, its only weakness, as per the brokerage, is declining net cash flow. The company has not been able to generate net cash.
Conclusion
Magellanic Cloud has demonstrated exceptional performance over the past five years, making it a standout stock in the market. Despite its current ASM LT: Stage 2 status, the company’s strong earnings and growth potential make it an attractive investment. However, investors should be aware of the risks associated with small-cap stocks and conduct thorough research before making any investment decisions.
