Crazy Stocks that Rewarded Investors beyond the Expectations in 2021!

So far, Year 2021 has been a great period for Indian Stock Market. Many Stocks turned Multibaggers in same period which helped investors to earn handsome returns on their investment. However, there are some stocks that rewarded its shareholders too much that share owners would have hardly believed on it. Returns have been higher than what investors might have expected from them!

Whether these stocks will continue to ride the rally or not, it is difficult to say. But having a look at these stocks and quick study on them might be good thing for us as educational purpose.

Tata Teleservices

Tata Tele or TTML was a significant name in Telecom sector providing CDMA services in partnership of NTT Docomo and Virgin Group. But after several years, Tata Teleservices started incurring high losses which prompted Docomo to exit from the Partnership.

In 2017, Tata Tele decided to exit from Consumer mobile business and sell the ownership to Bharti Airtel. All required approvals were received by 2019 and finally, consumer business of Tata Tele company was transferred to Airtel in Mid 2019.

Thereafter, company continued to operate its enterprise and some other communication related businesses. But, they were still in loss.

Even today, things have not changed much in the financials of Tata Tele. But stock has given out of the box returns to its shareholders!

From Rs 7.80 per share price on 1st January 2021, stock is trading at Rs 130 on exchanges, as on 3rd November. That is nearly 1560% returns! If someone had invested just 1 lakh in the stock on 1st January, his investment would be worth 15.6 lakh today.

As of now, Market Capital of Tata Tele is ₹25,000 crore which is way higher than many profitable companies as compared to loss making business of TTML!

So what has changed for the Tata Tele stock? Has business prospects improved? Or Tata Tele going to make super profits soon?

Till now, no big change is visible in the financials. Book value is in minus of almost -90. But there are two things that might be fueling Tata Tele stock.

Firstly, there are reports that Tata Group is developing Super App to directly sell consumer goods and services on its digital platform. This platform is expected to do a lot of business and therefore, will require huge handling support. There are expectations that Tata Tele will be assigned some work in Super App handling.

Beside of Super App, Tata Tele looks to expand its communication services provided to Small and Medium enterprises. In recent time, company through its subsidiary Tata Tele Business services has launched many new services for the enterprise customers.

Promoters of Tata Tele (Tata Group) have never pledged any shares in past and have also committed to support during liquidity problems if arises in the company.

Overall, it seems like market participants who are buying Tata Tele shares are assuming that Tata Sons (Tata Group) would revive its company in a new avatar soon.

Tata Group is considered one of the most trustable groups in India. This could also be prompting investors to believe on what is yet to happen and buy TTML shares much before any progress gets visible on the financials front of the company.

Brightcom Group

Brightcom Group offers Digital Advertising solutions to Big Companies like Airtel, Coca-Cola, Hyundai Motors, ICICI Bank, LIC, Maruti etc, and online publishers like facebook, LinkedIn, MSN, Twitter and Yahoo!. Company also provides solutions related to IoT based businesses across the Globe.

Since many years, company has been reporting strong growth in revenues and net profits. Earnings have grew by nearly 25% CAGR in last 10 years. ROE and ROCE ratios stood at double digit.

Debt was also declining of the company. And as of now, Brightcom is a zero debt company! However, share price never reacted on the growing size of the company before 2021.

Now, Brightcom stock has fulfilled what was missing in the company i.e outperforming and Rising share price. And this has happened in just few months!

Share was trading around Rs 6.70 per share on 31st May 2021. Since then, stock has seen Marvelous rally. Shareholders might haven’t expected to see this rally all together!

Today, Brightcom is trading around ₹126 (as on 3rd December). From 2021 beginning, stock has given almost 1,700% returns to its shareholders. 1 lakh invested in the share on 1st January or 31st May (share price was same on both dates i.e ₹6.7) would have turned almost 17 lakh today.

So, what has happened to Brightcom Group suddenly?

During mid 2021, company had issued bonus shares to its shareholders. Over split, bonus is a more beneficial thing for the shareholders. They had issued 1 bonus share for every 4 shares held by the shareholders. That is a first thing company did in 2021.

Brightcom Group has issued significant amount of shares to Foreign and other investors. Around 14 crore shares were issued to them at ₹37.7 for total consideration of Rs 530 crore. That is a big amount company recieved as if we see in 2020 end, Market Capital of Brightcom was just Rs 360 crore! So, it is also boosting share price.

Beside of fresh offering of equity shares, company also issued warrents totalling 1.5 crore to shankar sharma (vice chairman of First Global) at 37.7 rupees. These warrents can be converted into same quantity of Equity shares.

Overall, Brightcom has raised a lot of money which is going to be used in funding expansion plans (through both Organic and Inorganic routes).

Brightcom was a good growing company earlier and now, many new Big investors have also joined the list of company’s shareholders. That is a good thing and going to be beneficial in long term.

Now the Big question is whether Brightcom stock can continue to climb or not??

No doubt, valuations were attractive when it was below ₹10 per share 1 year ago. However at that time, there were two concerns in the company.

1. Low Promoter Holding! Promoters were not holding even 40% shares in their company when the Market Capital was too small.
2. No Reward to Shareholders! Company was earning great profits and cash flows were also good. Reserves of company had also swelled too much. But management did nothing to nicely reward shareholders.

Since well known investors have entered now in Brightcom stock, market participants might be overlooking low promoter holding concern. Brightcom has also issued bonus shares recently which is a good step towards rewarding shareholders.

Before recent rally, company was hugely undervalued in the stock market. Therefore at current levels, company still doesn’t looks overvalued or expensive after a tall buying.

But since stock has seen a big run up, chances of any Big correction will always be there in the share price.

Olectra Greentech

Olectra Greentech has basically two business divisions. One is polymer insulators and second is Electric bus. Company derives more than half of the revenues from Electric bus business. This business is also a high growth segment for Olectra Greentech as it is scaling up with a good speed.

Now, if we talk about the share, it has seen spectacular buying in 2021. In January month of this year, stock was trading close to ₹132 levels. And now, stock is around 830 levels and quite close to become a four digit stock! This jump in shares is nearly 525% returns!

It is difficult to say whether investors had expected this kind of rally in the share of Olectra Greentech or not? But considering the valuations and financials of the company, i think shareholders would haven’t thought about these kind of returns.

So, what is driving Olectra Share?

All around the world, EV theme is in great demand. Recently, Rivian company got listed in American Stock Markets at Market Capital of nearly ₹8-10 lakh crore. That is higher than Market Capital of Indian Automobile giants like Tata Motors and Maruti Suzuki.

Against this kind of Huge Market Capital, Quarterly revenue of Rivian company is not even 20 crore! Company has Big deals with Multinational Giants like Amazon but they are yet to generate any significant revenues.

So, when pure EV Stocks in America are seeing fire, why Indian EV companies can’t see fire?

As we just discussed, Olectra Greentech is generating more than 50% of the revenues from Electric bus business. And this segment is in skyrocket phase!

Company has received number of orders for Electric bus manufacturing from various buyers in recent months. From here too, pace of orders for Electric bus business is expected to be in a good momentum for near term.

So, EV theme seems to be the reason why Olectra Greentech shares are skyrocketing much more than the shareholders might have anticipated!

No more stocks to discuss.

All three stocks that were discussed here have seen and delivered Multibagger returns this year. Whether they will continue to reward their shareholders or not in near term, it is difficult to say.

But considering the recent growth in share prices of 3 companies, it can’t be said that shares are immune to any significant correction or decline from here! They can see the fall.

Also, the kind of returns that these stocks have delivered in past doesn’t promises or guarantees that similar returns can be achieved in future too if we invest in them at current prices.

That is the end of this post.

Good luck : )