- Penny stock Royal India Corporation has given stellar returns to its investors in the long term.
- The stock has skyrocketed 2474 percent in the last three years from ₹0.93 in May 2021 to currently trade at its 52-week high of ₹23.95.
- “The stock has consistently hit its 2 percent upper circuit since March 14, 2024,” noted a market analyst.
Discover how Royal India Corporation has transformed into a multibagger stock, delivering exceptional returns to its investors over the past few years.
Royal India Corporation’s Impressive Growth Trajectory
Royal India Corporation has been a standout performer in the stock market, especially for those who invested early. The stock has shown remarkable growth, consistently hitting its upper circuit limit since March 2024. This year alone, the stock has only seen negative returns in 12 sessions, making it a reliable choice for investors looking for consistent gains.
Monthly Performance Highlights
The stock’s performance has been nothing short of spectacular in 2024. It has jumped 45 percent in May, following a 47.5 percent rise in April, 39 percent in March, 49 percent in February, and 35.6 percent in January. These figures highlight the stock’s strong upward momentum and the confidence investors have in its potential.
Regulatory Framework: ESM and GSM
What is ESM?
The Enhanced Surveillance Measure (ESM) is a regulatory framework implemented by the National Stock Exchange (NSE) in India. It aims to enhance monitoring and surveillance of listed companies to ensure investor protection and market integrity. Under Stage I, the trading of securities is settled through a trade-for-trade mechanism with a price band of 5 percent or 2 percent. Under Stage II, the surveillance action permits trading on all trading days under periodic call auctions with trade-for-trade settlement and a 2 percent price band.
What is GSM?
Graded Surveillance Measures (GSM) are used to monitor and control unrealistic price and demand increases in company stocks that do not align with the company’s financial health and fundamentals. This system assigns grades to corporations to alert investors about potential stock price manipulation. The regulator initiates these measures upon detecting unusual price swings, which may indicate that a company is functioning as a “shell company” to inflate its stock price.
About Royal India Corporation
Royal India Corporation Limited engages in the wholesale trading of gold bullion, plain gold jewelry, gold coins, and medallions in India. The company was formerly known as Natraj Financial & Services Limited and changed its name to Royal India Corporation Limited in October 2006. The company was incorporated in 1984 and is based in Mumbai, India.
Financial Performance
In the December quarter (Q3FY24), the company posted a net loss of ₹3.74 crore as against a net profit of ₹4.94 crore in the same quarter last year. Meanwhile, its total income declined 66.5 percent YoY to ₹9.86 crore in the quarter under review as against ₹29.49 crore in the same quarter last year. Sequentially, the company’s net loss increased from ₹1.57 crore in the previous September 2023 quarter (Q2FY24). However, its revenue rose 67.4 percent from ₹5.89 crore in Q2FY24.
Brokerage View
According to domestic brokerage house ICICI Direct, Royal India Corporation demonstrates strong momentum, with its stock price consistently above short, medium, and long-term moving averages. The stock also reached a new 52-week high today. Additionally, the company has efficiently managed its assets to generate profits, as evidenced by an improving Return on Assets (ROA) over the past two years.
Conclusion
Royal India Corporation has proven to be a multibagger stock, offering substantial returns to its investors. However, it is crucial to be aware of the regulatory frameworks like ESM and GSM that the stock is currently under. These measures are in place to protect investors and ensure market integrity. As always, potential investors should conduct thorough research and consult with financial advisors before making investment decisions.
