1 Railway Stock Has Turned Rs 50,000 Into Rs 6.6 Lakh Corpus In 1 Year, Over 1220% Returns; Do You Own?

Railway stocks have witnessed extraordinary gains in 2023 so far, with some of them even becoming multi-bagger. But there is one railway stock that has not received much attention among giants like IRFC, RVNL and IRCTC. This one railway stock has not given double-digit, nor a triple-digit but mind-boggling four-digit returns in less than 12 months. It would be called smallcap stock K&R Rail Engineering.

K&R Rail is a leading Railway Construction Company in India.

On BSE, in the early trade of Monday, while market was in a caustious mood, K&R shares were rallying. The stock price gained as much as 1.71% in the opening bell by hitting an intraday high of Rs 729.90 apiece. The company's market cap also neared Rs 1,350 crore.

Year-to-date, the stock has skyrocketed by a massive 1,015.20% on BSE. The stock was a little over Rs 65 levels at the start of January. However, in 2023 so far, the stock has made periodic sharp jumps to reach a higher by Rs 664.45 apiece level compared to the beginning of January.

Let's suppose you bought K&R Rail shares for Rs 50,000 at the start of January 2nd that time the stock price was at Rs 65.45 apiece. Since then, your investment value has zoomed to Rs 5,57,600 at the current market price, registering an overwhelming 1015.20% return.

But from its 52-week low of Rs 55 apiece, the stock has risen by an eye-bulging 1,227.09%. This means if Rs 50,000 on December 26, 2022, which was the time when the stock was at its 1-year low, then the investors' corpus would rise to Rs 6,63,545, which is a breathtaking 1,227.09% upside in portfolio.

The stock's 52-week high is at Rs 863.35 apiece.

The company was founded in 1998 with a vision to cater to the ever-growing demand for Mass Transportation and bulk Logistics of Goods and materials through the Indian Railway networks.

With more than three decades of experience, the company is among the Leading railway EPCC Conglomerate in India and has executed Major Bridges and earthwork, Supply of P. Way Material for prestigious clients on Turnkey.

According to Trendlyne, among the positives for K&R Rail is that the stock price has outperformed its sector by 932% in the past year. Also, its Debt to Equity Ratio of 0.17 is less than 1 and healthy, implying that its assets are financed mainly through equity. Further, promoter pledges are zero which is also seen as positive. Additionally, the stock's Interest Coverage Ratio is 3.92, higher than 1.5, which means that it can meet its interest payments comfortably with its earnings (EBIT).

However, among the drawbacks are -- Price to Earning Ratio is 112, higher than its sector PE ratio of 41, while Return on Equity(ROE) for the last financial year was 6%, less than 10%, indicating an inefficient use of shareholder's capital to generate profit. Also, promoter shareholding decreased by 5% in the most recent quarter to 55.82%.

Notably, the stock's RSI and MFI are at 41.7 and 53.3, which is considered as oversold.

Also, K&R Rail's earnings were a mixed bag in the quarter ending September 2023. During Q2FY24, the company posted a revenue of Rs 163.28 crore, which is lower compared to revenue of Rs 200.09 crore in the preceding quarter. On the contrary, the company's PAT jumped to Rs 9.45 crore on a consolidated basis in Q4FY24, as against Rs 5.07 crore in Q1FY24.

Disclaimer: The recommendations made above are by market analysts and are not advised by either the author nor Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.