The Indian stock market is home to some of the biggest hidden gems such as penny stocks which have tremendous growth potential. Textile manufacturer Trident’s shares are one such penny stock that has delivered massive returns to its investors over the last one year, thanks to robust financial performance and business expansion.
Shares of Trident have delivered 455% returns to its shareholders in one year, in contrast to over 20% growth in benchmark indices, the BSE Sensex and the NSE Nifty, during the same period.
From ₹9 to ₹53: This penny stock turned into a multibagger in one year
Trident share has witnessed a strong rally in the last one year and recently it hit a 52-week high of ₹59.90 on November 29, 2021. The textile stock has gained 383% since the beginning of this year (year-to-date basis) and climbed 213% over a six-month period. In the last one month, the stock witnessed lackluster trade and dropped marginally by 0.5%.
On Friday, Trident shares opened marginally higher at ₹53.20, against the previous close price of ₹53.15 on the BSE. During the first hour of trade, the stock hit an intraday high and low of ₹53.45 and ₹51.70, respectively. At the time of reporting, the stock was trading 2.2% lower at ₹51.95 on the BSE, while the market capitalisation stood at ₹26,473.49 crore.
On the technical front, the stock is currently in a bullish range from mildly bullish on September 2, 2021, at ₹22.50. The shares were moving higher than 50-day, 100-day, and 200-day moving averages, but lower than 5-day and 20-day moving averages.
Financial and business highlights
Trident is the flagship company of Trident Group, a $3 billion Indian business conglomerate. Headquartered in Ludhiana, it operates in two major business segments - textiles and paper - with its manufacturing facilities located in Punjab and Madhya Pradesh.
On the financial front, the company has reported positive earnings during the last four consecutive quarters. For the second quarter ended September 30, 2021, the company reported consolidated profit after tax of ₹234.59 crore, up 122% against ₹105.69 crore during the previous corresponding quarter. Consolidated sales rose 44% to ₹1,691.59 crore as against ₹1,173.98 crore during the same period last year.
The net debt of the company reduced significantly to ₹1,045.4 crore, down 15.1% on Q-o-Q basis which showed its strong ability to service debt.
Boosted by strong earnings, the company announced a 36% dividend (₹0.36 per fully paid-up equity share of ₹1 each) for its shareholders.
Earlier this July this year, the company commenced commercial production of yarn in a new spinning unit with a capacity of 61,440 spindles and 480 rotors. It has also boosted its domestic market presence by launching a new e-commerce website.
Recently, it commissioned a 7.6MW Solar Power Plant at Budhni, Madhya Pradesh as part of its strategy to use renewable and clean energy for reducing carbon emission. The plant is expected to produce 33,500 units per day to be consumed in Budhni manufacturing facilities.
Last month, the textile giant announced discount gift voucher for its 15 lakh shareholders. Under this special offer, valid from December 10 to until January 2, 2022, shareholders can avail ₹2,000 off on all its products on a minimum purchase of ₹5,000, and ₹4,000 off on order of ₹10,000 and above.