Multibagger small cap penny stock: Even as broader markets remain under severe selling pressure in recent months, some stocks have managed to weather the storm and defy the trend. Kothari Industrial Corporation is one such stock that has remained resilient despite the heavy sell-off.
In the current year, the company’s shares have gained 84%, compared to a 20.10% drop in the Nifty Smallcap 100 index. Over the last six months, it has delivered a 280% return. Looking further back, the stock has soared 8,747%, rising from ₹1.80 per share to ₹159.25 per share in less than 12 months.
For perspective, an investor who invested ₹1 lakh during this period and held onto the investment would have seen its value grow to ₹88.50 lakhs. Retail investors increased their stake in the company during the December quarter, raising their total holdings from 41.3% in the September quarter to 53%.
The Life Insurance Corporation of India (LIC) holds a 1.89% stake in the company, while the remaining 44.1% stake is owned by the company’s promoters, as per the BSE shareholding data.
Kothari Industrial Corporation is engaged in the manufacturing and blending of fertilizers and operates a network of distributors in the southern states, where it has established strong brand recognition. The company has leased its fertilizer factory to Coromandel International Limited.
Additionally, it deals in FMCG products such as healthcare items and is involved in the manufacturing of rusk, cookies, and dum roots.
Recent developments
The company signed a memorandum of understanding (MoU) with the Government of Assam in late February for the mining of rare earth and critical minerals in the state.
Under the MoU, the company has committed an initial investment of ₹200 crore. The project will be developed in collaboration with the Assam government and its public sector undertakings (PSUs). This expansion into Assam represents KICL’s first step beyond its home base in Tamil Nadu.
The company stated that it is actively working on expanding into multiple states across India and, in the near future, plans to establish its presence internationally.
Meanwhile, this expansion into mining aligns with the company’s ongoing diversification strategy. Earlier, it had stated that it continues to explore expansion opportunities and will make necessary investments when attractive prospects arise.
Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.
