Indian stock markets have been on a roll up until January 2018 from January 2017 with the benchmark Sensex rising as high as 35% and Nifty surpassing two psychological levels of 10,000 and 11,000 in the same period under review. Since the beginning of February 2018, Indian equities came under heavy pressure of global sell-off due to which the key index Sensex slipped nearly 1,500 points in a single week posting a vertical decline of 1,274 points intraday (6 February 2018).
Along with the global sell-off, the introduction of a tax on LTCG (Long-Term Capital Gain) on equity and equity-linked mutual funds further triggered the bloodbath. The Finance Minister Arun Jaitley brought the long-term capital gains in equity over Rs 1 lakh under a tax net of 10% which resulted in short-lived panic in the domestic stock market. Amid the substantial gush in stock markets, we bring to you a small-cap stock below Rs 100 which turned Rs 10,000 to Rs 1 lakh in just 5 years of time to buy and gain up to 40%.
Shares of Rico Auto Industries have grown over 10 times in a period of last 5 years. The stock of Rico Auto Industries is priced below Rs 100 and had risen about 964% to Rs 83.55 in the span of last 5 years. If one could have brought about 1,274 shares (approx) of Rico Auto Industries in 2013 for an amount totalling Rs 10,000, that amount must have turned into Rs 1 lakh by now. In the year 2017, shares of Rico Auto Industries returned over 65% vastly outperforming the benchmark Nifty Auto index which rose about 32% in the same duration.
The research and brokerage firm Sharekhan has given buy rating with a target price of Rs 115 which implies an upside of around 39% from the current market price. Recently this month only, Rico Auto Industries announced a dividend of Rs 0.4 per equity share. The company fixed a record date 22 February 2018 for the purpose of payment of dividend. Shares of Rico Auto Industries have a face value of Re 1 and are a constituent of S&P BSE Small Cap index.
Rico Auto Industries is an auto and equipment manufacturer and commands a market capitalisation of about Rs 1,100 crore on BSE. Rico Auto Industries Ltd is a major auto-part supplier to domestic automakers such as Maruti Suzuki, Tata Motors and Mahindra & Mahindra.