Rs 10,000-investment swells to Rs 11 lakh! This smallcap multibagger soared 11K% in just 10 years

Shares of pipe manufacturing company Apollo Pipes have offered blockbuster returns to investors in the last 10 years, rising 11000% in the said period. If an investor had invested Rs 10,000 in the stock 10 years ago and stayed put, the investment would have swelled to Rs 11 lakh, according to an analysis by ETMarkets.

Apollo Pipes was just a penny stock at Rs 4.83 in 2013 and has risen multifold since then to Rs 540 levels currently.

The multibagger stock has risen from being a penny stock available at just Rs 10.20 in April 2003 to over Rs 600 currently. In the last five years, the shares have surged 522% and the same jumped nearly 830% in the last three years.

Apollo Pipes, a smallcap company with a market capitalization of about Rs 2,148 crore, manufactures and distributes pipe systems. The company offers pipe fittings, sprinkler systems, and solvent cement. It has an EPS of 6.23 on a trailing twelve month (TTM) basis and the stock is currently trading at a PE of 87.67.

According to the shareholding pattern available with the exchanges, promoters own majority of the stake at 52.03%, while the rest of 47.33% lies with the public shareholders.

Among the public shareholders, mutual funds have 11.23% stake, while foreign investors own a minor 2%. Retail investors have a combined holding of nearly 26% in the company.

Apollo Pipes has seen its sales grow manifold from just Rs 68 lakh in FY13 to Rs 784 crore in FY22. Meanwhile, profit after tax (PAT) too surged from Rs 36 lakh to nearly Rs 50 crore in the same period.

For the nine-months ending December period, the company's revenue increased 23% year-on-year to Rs 663 crore, while EBITDA stood at Rs 39 crore. Meanwhile, PAT declined to Rs 9 crore, compared with Rs 34 crore in the same period previous year.

Technical outlook - What should investors do?
Price action in the last couple of months in Apollo Pipes shows a major phase of trend consolidation between Rs 580-412. This consolidation phase is taking the form of an ascending triangle, and breakouts from this pattern can lead to some very dynamic price movement, according to technical analysts.

"The long-term trend seen on the monthly charts remains bullish. Prices should rally to Rs 750 and, above that, to Rs 850. Accumulate between Rs 540-550. Add after price breaks above Rs 580. This could be a long-term hold with a holding period of 8–12 months or more," said Manish Shah, an independent trader.

"The stock witnessed strong buying in the range of Rs 537 to Rs 520 levels on March 3, 2023, and made a high of Rs 577. At present for the second week the stock is seeing correction and today it made a low of 529 from where again buying emerged," said Mileen Vasudeo, Senior Technical Analyst, Arihant Capital Markets.

"The momentum indicator viz RSI is positively posed and the stock is showing higher Relative strength. Hence, one can hold the stock with a stop loss of Rs 515 on the higher side it may test the target of Rs 577 earlier high or even extend its gains up to Rs 600 – 625 levels in a couple of weeks," Vasudeo added.

(With data inputs from Ritesh Presswala)

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)