Investors, Patanjali earned bumper returns from Ruchi Soya; Anil Singhvi team reveals all

Stocks of Ruchi Soya have had a good run since its promoters were changed. Investors too have gained from this stock. But what potential does the stock still hold and how will it trade going forward? Zee Business’ Sandeep Grover presented a detailed report on this to Managing Editor Anil Singhvi. 

In his report, Grover points out that Ruchi Soya stock has seen tremendous action. Since the time of its acquisition by Patanjali Ayurved, the company has gained profits of over 700 per cent on its investments! The company was acquired on 18 December, 2019.

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Prior to the acquisition, the capital reduction was done at a ratio of 100:1. Patanjali invested Rs 4350 cr to acquire the company. The stock price at that time was Rs 148.70. The share price has appreciated by over 8.5 times! Ruchi Soya is currently trading around Rs 1237. The market capitalisation for the company stands at Rs 36621 crore.

Grover, however said that the financials of the company do not back the numbers. The income growth in FY20 is only 3 per cent though the profits have grown by 100 times. There was a one-time gain in the profits, he further said adding that if this onetime gains is removed the profits will get reduced to 2.7 times.

Though the management has got good returns, even it is surprised to see this appreciation in the stock price. All this has happened at a low volume as there is a 5 per cent circuit. There are indications that there is a reversal in this stock.

Even the management is a bit worried about these developments, he added.

Earlier, Zee Business has asked Swami Ramdev about this development, to which the latter said that the situation would require some control. He said that he would like to see some downward correction in the stock prices.

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Managing Editor Anil Singhvi said that the stock was trading between circuits. The circuits are now happening at 5 per cent lower levels.