Small cap stocks: After comapnies turn profitable, shares soar; Uttam Sugar Mills gives 100% returns

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Mumbai | Published: September 1, 2016 6:10:01 AM

More than a third of small-cap stocks which have doubled in the last six months have either turned profitable in FY16 or have seen a net profit growth of at least 50% in the previous fiscal, data compiled form Capitaline show.

More than a third of small-cap stocks which have doubled in the last six months have either turned profitable in FY16 or have seen a net profit growth of at least 50% in the previous fiscal, data compiled form Capitaline show.

Of the 92 firms with a market capitalisation between `100 crore and `1,000 crore — 13 companies reported a net profit in 2015-16 against loss in the previous financial year, whereas the bottom line of 20 firms grew over 50%.

The BSE small-cap index has outperformed the index in the last six months with a gain of 32.5% against the Sensex’s gain of 23.7% during the same period.

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Prominent among the turnaround companies which gave more than 100% returns to investors was Uttam Sugar Mills posted a profit of `15.47 crore in the financial year 2015-16 after posting a loss of `88.19 crore in FY15. Its stock appreciated by 134% during February 26, 2016 to August 31, 2016. Taj GVK, which posted a profit of `8.4 crore in FY16 after incurring a loss of `1.97 crore a year ago, has generated a return of 100% during the past six months.

Companies which have reduced their losses significantly have also given handsome returns to their investors. The stock of Kirloskar Electric Company has appreciated by 137%.

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