Today, we will discuss a potential multibagger stock, Twenty First Century Ltd, a company operating in share trading, capital markets, and finance. The company Twenty First Century Management Services Ltd is also set to apply for an NBFC license soon.
Founded in Mumbai in 1986, this stock is currently trading at ₹105 as of August 21, 2024. It has the potential to become a multibagger stock in the near future.
Fundamentals of the Twenty First Century Ltd
This stock has a relatively small market capitalization, currently standing at ₹82 crore. With a face value of ₹10, the company has delivered a return of 141.35% over the past three months and 430.86% over the last year.
Can Twenty First Century Ltd be a Multibagger Stock?
Let’s examine the fundamentals that make this stock a potential multibagger:
ROE (Return on Equity)
ROE measures how much profit a company generates with each rupee of equity investment. Twenty First Century Ltd boasts an impressive ROE of 60.39%, indicating that it earns ₹0.6039 for every rupee invested. This is a strong indicator of the company’s robust fundamentals.
ROCE (Return on Capital Employed)
ROCE reflects the profitability relative to the capital employed. This stock has an ROCE of 61.62%. In India, a ROCE above 10% is considered good, so this high ROCE suggests significant profitability.
ROA (Return on Assets)
ROA shows how effectively a company uses its assets to generate profit. With an ROA of 57.90%, well above the 5% benchmark for Indian companies, it indicates strong fundamental performance.
Debt-Equity Ratio
This ratio reveals the level of debt relative to equity. The company has a debt-equity ratio of 0, meaning it is debt-free. A ratio below 1 is favorable in India, and a zero ratio signifies a strong financial position.
CAGR (Compound Annual Growth Rate)
CAGR measures growth over time. The company has achieved a sales CAGR of 129.80% and a net profit CAGR of 153.91% over the past three years, reflecting impressive growth.
EV to EBITDA (Enterprise Value to Earnings Before Interest, Taxes, Depreciation, and Amortization)
A lower EV to EBITDA ratio is preferable. The company’s ratio is 1.25, which is favorable and suggests good value.
Operating Profit Margin (OPM%)
OPM indicates profitability from operations. The company has an extraordinary OPM of 96%, well above the 20% threshold for Indian firms, highlighting excellent profitability.
Promoter Holding
A strong indicator of a company’s health is when promoters hold at least 50% of the shares. In this case, promoters hold 64.30%, showing their commitment and control over the company.
EPS (Earnings Per Share)
EPS measures profit earned per share. With an EPS of ₹56.57, the company demonstrates robust profitability.
Shareholding Pattern
As of June 2024, the shareholding pattern is as follows:
Promoters: 64.30%
Public: 35.71%
Target for the Twenty First Century Ltd
Currently trading around ₹105, this stock could potentially surpass ₹300 within the next two years. Given its fundamentals and business expansion plans, this target might even be achieved sooner.
My Opinion
In my view, Twenty First Century Ltd is a company with strong fundamentals and could provide excellent returns in the future. Consider investing with a long-term perspective.
Note: The suggestions provided are based on detailed analysis, but errors may occur. Always consult your financial advisor before making any investment decisions. Most data presented is from March 2024.
This is not investment advice. Stock markets are subject to risks. Always seek expert advice before investing.
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