Multibagger penny stock jumps 10% as company posts strong Q2 results. Do you own it?

Multibagger penny stock: Shares of Sarveshwar Foods surged nearly 10 per cent in intra-day trading on Monday, October 21 after the company posted impressive financial results for the quarter ended September 2024 (Q2FY25). The microcap FMCG firm, which focuses on organic products, has shown significant growth in both revenue and profit, attracting investor attention.

Strong Financial Performance

Sarveshwar Foods reported a robust 68.53 per cent increase in net profit for Q2FY25 at ₹8.14 crore compared with ₹4.83 crore in the same quarter last year. The company’s revenue also saw a healthy growth of 32.20 per cent, rising to ₹271.31 crore from ₹205.22 crore in the corresponding period in 2023. This performance reflects Sarveshwar Foods’ ability to scale its operations and cater to the growing demand for organic products.

The company’s financial performance for the first half of FY25 was equally strong. Net profit for the period rose by nearly 45 per cent to ₹11.2 crore, up from ₹7.73 crore in the first half of FY24. Meanwhile, revenue from operations increased by over 27 per cent to ₹504.36 crore as against ₹396.3 crore in the same period last year.

Rohit Gupta, Chairman of Sarveshwar Group, expressed his enthusiasm about the company’s performance, noting that the company surpassed ₹500 crore in sales during the first half of the fiscal year. He credited this achievement to product innovation and the growing consumer demand for organic and sustainable food products, particularly under Sarveshwar’s ‘NIMBARK’ brand. Gupta further emphasised the company’s dedication to quality, sustainability, and the empowerment of farmers, which has been key to strengthening its supply chain and expanding its market reach.

In July 2024, Sarveshwar Foods took a significant step to strengthen its capital base and finance future growth. The Board of Directors had approved the issuance of 10,20,00,000 fully convertible warrants at an issue price of ₹9.70 each. These warrants were to be allotted to individuals in the “Non-Promoter, Public Category,” giving them the right to convert each warrant into one equity share.

Stock Price Trend

Following the release of its strong Q2 results, Sarveshwar Foods’ stock rallied nearly 10 per cent to an intra-day high of ₹10.78. While the stock remains 31 per cent below its all-time high of ₹15.73, achieved in February 2024, it has risen 167.5 per cent from its 52-week low of ₹4.03, recorded in October 2023. This stock has delivered multibagger returns, with a 118 per cent surge in the past year and a 98 per cent increase year-to-date in 2024.

The company has continued to perform well in recent months, with its stock gaining about 6 per cent in October following a 12 per cent rise in September. Investors are increasingly eyeing Sarveshwar Foods as a growth opportunity, driven by its strong financial results and expanding market presence in the organic food segment.