From ₹9 to ₹283 in just one year! This realty penny stock needs investor caution

Shares of little-known real estate company Radhe Developers skyrocketed in the past one year, surging a whopping 3,000% during the period. The multibagger stock, however, is under selloff pressure for the past one week, though it has grown investors' money manifold over the last one year.

The microcap stock has grown precisely by 3,015% in the last one year, with its share price shooting from ₹9.3 on January 5, 2021, to ₹289.75 in intraday trade on the BSE today. In comparison, the benchmark index BSE Sensex has gained 23.5% during the same period, while the BSE Realty index surged 55%. Thus, the stock has outperformed Sensex by 2,991% in 1 year returns.

Simply put, ₹1 lakh invested in this realty stock on January 5 last year would have now turned more than ₹31 lakh at present.

The stock though has lost momentum in the last one month, and has been heading southward. It has fallen more than 14% over one month and 7.6% in the last one week.

For the second quarter ended September 30, 2021, Radhe Developers reported net profit of ₹9.11 crore as against net loss of ₹0.58 crore in the same period last year. Net sales grew to ₹14.70 crore compared to ₹0.56 crore in the corresponding period last year. The operating profit rose to ₹11.54 crore in Q2 FY22, from a loss of ₹1.03 crore in Q2 FY21.

In the past six months, the stock of this Gujarat-based company has zoomed 2,700%, while it soared 1,400% over the last three years. In the long-term horizon, the stock has delivered 1,200% returns to its shareholders over the last five-year period, while it rallied 2,300% during the last ten years.

Radhe Developers’ share started the New Year on a bearish note and dropped more than 13% over the last three days. Extending its losing streak, the stock opened lower today with a loss of 4.98% to hit an intraday low of ₹278.35 apiece. The market capitalisation of the company dropped to ₹707.68 crore in the afternoon trading session. A total of 47,000 shares have changed hands over the counter amounting to a turnover of ₹1.31 crore on the BSE.

Radhe Developers shares hit a 52-week high of ₹360 on November 30, 2021, while it touched a 52-week low of ₹7.84 on April 19, 2021. The stock was currently trading higher than the 50-day, 100-day, and 200-day moving averages, but lower than the 5-day and 20-day moving average, according to stock research platform Markets Mojo.

As per the research platform, the stock saw a drop in investor participation, with the delivery volume, the quantity of the stock delivered to the actual buyer out of the total traded volume, declining by 15.35% to 0.42 lakh on January 1, as compared to 5-day average volume. On the technical front, Radhe Developers turned bullish from mildly bullish on August 12, 2021, at ₹12.33.

The company’s board is scheduled to meet on January 11, 2022, to consider and approve unaudited financial results for the quarter and nine months ended on December 31, 2021.