Investing in stocks has long been considered a path to wealth creation, but historically, few retail investors have taken advantage of this opportunity. However, there has been a significant surge in retail participation in stock investing. Investors are increasingly viewing equities as a promising asset class compared to traditional options like real estate and gold.

Many investors are drawn to small-cap and penny stocks due to their lower prices, hoping for rapid gains if the companies are fundamentally strong and well-positioned within their industries. While some stocks have indeed rewarded investors with significant growth, others have remained stagnant.

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In this article, we explore the performance of five small-cap stocks that were trading between ₹0.55 and ₹17 five years ago and have now surged to trade between ₹60 and ₹199 apiece.

Lloyds Engineering Works

Following the pack was Lloyds Engineering Works (formerly Lloyds Steels Industries), which has witnessed an astounding surge in its stock price, soaring from a meager ₹0.55 to the current market price of ₹66.85 per share, resulting in a stellar rally of 12000%.

After a period of lackluster performance in CY18 and CY19, the company’s shares made a remarkable comeback in CY20, ending the year with an impressive 104% return. 

The subsequent year witnessed an extraordinary rally of 1920%, and after negative returns in 2022, the stock continued its bull trajectory in 2023 by delivering a massive return of 167%. In the ongoing year, it is already up by 61%. 

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In December, domestic brokerage firm Ventura Securities initiated coverage on the stock with a ‘buy’ rating with a target price of ₹72, citing the company’s strategic positioning in the infrastructure sector and capex sector, aligning with a government spending surge.

The company is involved in the development, production, and deployment of robust equipment, machinery, and systems tailored for the hydrocarbon sector, oil and gas, steel plants, power plants, nuclear plant boilers, and comprehensive turnkey projects.

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RattanIndia Enterprises

RattanIndia Enterprises also emerges as a standout performer, delivering a staggering return over the past five years. During this period, the shares have witnessed an extraordinary appreciation, soaring from ₹1.75 apiece to the current trading price of ₹75, delivering a remarkable return of 4185%.

Over the past four calendar years, the stock has emerged as a multibagger, achieving remarkable returns of 261% in CY20 and an astounding 605.95% in the subsequent year.

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As the flagship company of RattanIndia Group, RattanIndia Enterprises is at the forefront of pioneering new-age businesses across diverse sectors. From e-commerce ventures like Cocoblu Retail to revolutionary electric vehicles through Revolt Motors, the company’s portfolio spans fintech solutions with Wefin, fashion brands under Neobrands, and cutting-edge drone technology with Neosky.

Revolt Motors flagship model RV400 has been witnessing robust demand and is by far the most technologically advanced bike in the world, according to the company’s recent exchange filing. 

Inox Wind

Inox wind, a fully integrated wind energy player, has also witnessed remarkable growth in recent years, reflecting its strong performance in the market. Over the past five years, the company’s stock price has surged by an impressive 787% to the current market price of ₹150.91.

This strong spike in shares was attributed to the company’s robust order wins in the renewable energy space. The company provides end-to-end turnkey solutions to customers, from conception to commissioning to operations and maintenance services.

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In its March report, domestic brokerage firm ICICI Securities upgraded its rating to ‘buy’ and maintained a P/E-based target price of ₹675 apiece, valuing the business at 28x FY26E EPS.

The brokerage highlighted Inox Wind’s significant recovery following a period of slowdown in line with the wind energy sector, during which the company experienced a notable increase in debt. However, Inox Wind has been actively reducing its debt burden, and it is projected that its net debt will decrease to ₹4.7 billion by the end of FY24.

Avantel

This telecom product manufacturing company has been on a remarkable growth trajectory since 2019, showcasing consistent upward momentum in its stock performance. What sets this stock apart is its resilience, maintaining a bullish trend with minimal setbacks. Remarkably, out of the last 36 months, the stock closed positively in 23, showcasing its robust performance.

Looking at the stock’s performance over the past five years, it has moved from ₹4.22 to its current level of ₹123.35, marking a massive rally of 2822%. 

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Since the early 2000s, the company has undergone significant strategic reorientation, shifting towards offering system-based solutions across four main verticals: satellite communications, HF communications, electronic warfare, and radar systems. 

Presently, the company is further enhancing its portfolio by developing SCA-compliant software-defined radios, high-power HF systems, air defense radars, and small satellites. This strategic focus on innovation and diversification positions the company for continued success and growth.

Man Infra

Man Infraconstruction emerges as another standout performer, rewarding its shareholders with a remarkable rally. From March 2023 to February 2024, the company’s shares ended each month in positive territory, delivering an impressive return of 214%. This astounding rally has catapulted the stock to deliver return of 871% in 5 years. The stock is currently trading at ₹199 apiece. 

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Renowned as an integrated engineering, procurement, and construction (EPC) company, Man Infraconstruction boasts extensive experience and execution capabilities across diverse segments. From ports to residential, commercial, industrial, and road construction projects, the company’s expertise spans various sectors, making it a versatile player in India’s infrastructure landscape.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decision.