Multibagger Stock: Up 5900%, this financial stock turned ₹10,000 into ₹6 lakh in 3 years

Shares of financial firm Dhruva Capital Services have given multibagger returns to their investors in the past 3 years, surging 5900 percent in this period.

The stock surged from ₹3.5 in December 2020 to currently trade around ₹210.

This implies that an investment of ₹10,000 in this penny stock in December 2020 would have turned into ₹6 lakh this year.

Meanwhile, it has also given exceptional returns – skyrocketing 889 percent – in the last one year and gained 797 percent in 2023 YTD. The stock was trading around ₹23.41 in December last year.

Read here: Intellivate Capital Ventures turned ₹10,000 into over ₹1 lakh in 2023

Of the 12 months of 2023 (considering December so far), the stock gave positive returns in seven, was flat in one (August), and was in the red in the 4 remaining months. It gave double-digit returns in all the 7 months it was positive in.

The stock rallied the most in January, surging almost 90 percent, followed by September, up 63 percent. Meanwhile, it soared around 53 percent, both in November and April; and gained over 45 percent in December so far. It also advanced 21.5 percent and 26 percent in July and June, respectively.

However, it shed the most in May, down 22.5 percent, followed by October, down 15 percent. It also lost 12 percent in February and 4 percent in March of this year.

The stock hit its record high of ₹210.05 today, on December 28. It has skyrocketed 889 percent from its 52-week low of ₹21.24, hit on December 28, 2022.

Read here: Up 980% in 2023 so far, this stock turns ₹10,000 into ₹1.08 lakh in less than a year

The rise in its stock price came on the back of a significant rise in its profit over the past few quarters.

In the September quarter, the company's net profit jumped to ₹24.2 lakh from ₹2.6 lakh in the year-ago period. Meanwhile, its total income surged to ₹28.5 lakh in the September quarter from ₹6.3 lakh in the corresponding period last year.

Dhruva Capital Services Ltd. operates as a non-banking financial company in India. It offers financial and investment services. The company was incorporated in 1994 and is based in Udaipur, India.

While the recent performance of this stock has been impressive, it's crucial to underscore the inherent risks associated with investing in penny stocks. These securities are known for their high-risk nature and are not suitable for investors who prioritise a risk-averse strategy. It is strongly advisable that only high-risk tolerance investors consider allocating a small portion of their portfolio to penny stocks. Seeking guidance from a financial advisor before making any portfolio adjustments is highly recommended.

Read here: These 5 penny stocks beat Nifty 50 return in 2023

It's important to acknowledge the challenges tied to penny stocks, often represented by very small companies with limited analyst coverage and sparse public information. Obtaining insights from the management of these companies can be arduous. Unless backed by compelling and well-researched reasons, investing in penny stocks is generally discouraged for serious, long-term investors. Prudent decision-making in this realm requires a careful evaluation of associated risks and potential volatility, emphasising the need for professional financial advice.

Disclaimer: This story is for educational purposes only. Please speak to an investment advisor before making any investment decisions.