Ajanta Soya: Will Ajanta Soya become a multibagger stock, know the positive and negative factors here
Whether a stock will give multibagger returns or not, it generally depends on two factors. First, how cheap is the valuation of the company and second, how much scope there is for growth in that industry. Ajanta looks very strong on both these parameters. But, there are some problems with Ajanta Soya. Let’s discuss each one one by one.
What does Ajanta Soya Limited do?
Ajanta Soya Limited (ASL) has been doing business in the edible oil, vegetable ghee and bakery fat sector for the last three decades. It was founded on January 13, 1992. The company describes itself as a specialist in the manufacture of vegetable and various types of cooking oils. This includes shortening products formulated for special fats such as biscuits, puffs and pastries.
Ajanta Soya dominates mostly in the northern states. Most of its sales come from Rajasthan, Delhi, Haryana, UP, Bihar and parts of eastern India like Guwahati.
How have been the quarterly results of Ajanta Soya?
In the second i.e. September quarter of the financial year 2024-25, the financial results of most of the companies are coming out to be very poor. But, Ajanta Soya has presented a very strong result. Ajanta Soya’s sales have jumped by 11.84% and it increased to Rs 303.89 crore. At the same time, there has been a tremendous increase of 571.19 percent in net profit and it reached 7.92 crore on an annual basis in the September quarter.
Ajanta Soya has presented excellent results on quarterly and annual basis. This may increase the confidence of investors in the company, who were upset with the fall in the stock for some time.
What is the condition of the edible oil industry?
The government’s focus on the edible oil industry has increased. The central government has also increased the import duty in September to promote the domestic edible oil industry. The government has made it clear several times that it will not withdraw this increase. Companies like Ajanta Soya in the edible oil sector are expected to benefit greatly from this. Its effect can first be seen on the September quarter results of Ajanta Soya.
However, the prices of raw materials can definitely be a matter of concern for the company. If the price of raw materials increases too much, then its effect can also be seen on the company’s profits.
What is the status of Ajanta Soya shares?
Ajanta Soya shares closed at Rs 40.30 with a jump of 1.61 percent on Thursday (November 14). The company has given a return of about 42 percent in the last 6 months. However, if we talk about the last one year, then investors have got only 18 percent return from Ajanta Soya. This shows that there has not been any major jump in the price of shares for the last one year. The reason for this is also clear, because before the increase in import duty, most of the edible imports were done.
The market cap of Ajanta Soya is Rs 321 crore. This means that the company still has a lot of scope for growth. Investors can benefit from this in the form of multibagger returns.
(Investment in the stock market is subject to risks. Take expert advice before making any investment.)
