From ₹0.65 to ₹19: Multibagger penny stock Captain Pipes surges over 2,800% in 4 years | Stock Market News

Multibagger Stock: Captain Pipes, one of the leading companies in the PVC pipes industry, has witnessed a remarkable surge in its share price on Dalal Street, growing exponentially in a short span of time and establishing itself as one of the significant wealth creators in recent history.

The company’s stock, which was trading at Re 0.65 four years ago, has skyrocketed by an astounding 2823% to its current market price of ₹19. This extraordinary performance includes stellar annual returns, with gains of 345% in CY21, 427% in CY22, and 22% in CY23.

In May 2023, the stock crossed the ₹35 mark to hit an all-time high of ₹36. However, it subsequently witnessed heavy profit booking, leading to a 47% decline in value from its peak.

The company’s shares have been trading ex-bonus (2:1) and ex-split (1:10) since March 2, 2023. Before this corporate action, the stock was valued at ₹640 apiece. 

The company offers a comprehensive range of PVC pipes and fittings designed for various applications in agriculture and plumbing. Its product portfolio includes agricultural solutions such as column pipes, pressure pipes, and agri fittings, as well as plumbing solutions encompassing uPVC pipes, CPVC pipes, and SWR pipes and fittings.

Captain Pipes has experienced healthy growth over the past years, driven by expansion initiatives. The company’s turnover has shown an increasing trend, supported by government incentives provided to agricultural industries.

Additionally, the company has ventured into solar and greenhouse activities, which are also benefiting from government assistance. However, it is facing intense price competition from peers and challenges arising from the international financial crisis. With nearly three decades of experience in manufacturing and international marketing, the company has seen its customer base grow steadily.

Recently, the company approved a fundraising initiative of ₹20.6 crore. The board has approved the issuance of 1,25,00,000 shares on a preferential basis to investors at a price of ₹16.5 per share. The issuance is subject to shareholder approval at the Extraordinary General Meeting (EGM) scheduled for January 23, 2025.

Revenue declines in Q2 amid weak demand

During Q2 FY25, the company’s revenue from operations declined by 24.6% year-on-year, reaching ₹12.61 crore compared to ₹16.72 crore in the same period last year. This significant decline was primarily due to reduced demand in both the agriculture and building segments, attributed to an extended and severe monsoon season across most markets.

Despite the revenue decline, the company’s EBITDA increased by 4.7% year-on-year, rising from ₹1.69 crore in Q2 FY24 to ₹1.77 crore in Q2 FY25, driven by a 392-basis point improvement in margins. However, profit after tax (PAT) declined by 18% year-on-year to ₹0.85 crore in Q2 FY25, due to higher finance costs.

During the quarter, the company informed investors that the construction of its new plant near Ahmedabad is progressing as scheduled, with completion expected by December 2025. This facility, with a production capacity of 20,000 MTPA, is anticipated to support the company’s growth objectives and enhance its production capabilities.

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