From ₹100 to ₹787: This multibagger stock delivered 8x returns in 2022

The Russia-Ukraine crisis and the Covid-19 pandemic have triggered high volatility in the stock market in the last two months. Despite recent volatility, several stocks have managed to give massive returns to their shareholders.

Shanti Educational Initiatives, a school management solutions provider, is one such stock that has turned an investment of ₹1 lakh into around ₹8 lakh in just 2.5 months. The company, listed on the Bombay Stock Exchange (BSE), provides solutions to build and manage educational institutions from playschool to grade 12.

The education stock has surged from ₹99.95 to ₹787.15 in just 51 sessions (January 1, 2022, to March 15, 2022). This means that the stock grew by 687% since the beginning of the calendar year 2022 (CY22), on a year-to-date basis.

What is driving record rally in this education stock?

The smallcap stock with a market capitalisation of ₹1,267.3 crore has registered strong growth this year despite reporting losses in two out of three quarters of the current financial year 2021-22. There was no specific reason for the high demand for the stock that drove the share price to record high.

In comparison, its peer company Zee Learn delivered a negative return of 23% on a year-to-date (YTD) basis. Among others, it also outperformed its rivals such as CL Educate, Career Point, VJTF Eduservices, Virtual Global, Global Education and MT Educare Tree House Education and Accessories by a huge margin.

On Tuesday, Shanti Educational Initiatives’ shares opened higher and hit its 5% upper circuit, and touched an all-time high of ₹787.15 apiece on the BSE. The stock has been rising for the last 12 sessions and has surged 62.94% during this period. It has gained 85% in a month, 535% over a six-month period, and 464% in the past one year.

On the technical front, Shanti Educational turned ‘bullish’ from ‘mildly bullish’ on February 4 this year at ₹302.10 levels, as per stock research platform MarketsMojo. The stock currently trades higher than 5-day, 20-day, 50-day, 100-day, and 200-day moving averages.

What does the company do?

Founded in 2009, Shanti Educational Initiatives is a venture of Ahmedabad-based Chiripal Group and is primarily engaged in the business of providing educational support services to preschools, K-12 premium category preschools in India. The K-12 education is the term used to denote the education imparted in the primary and secondary phases of school life, including K or kindergarten to 12 which stands for the 12th standard.

The company has a presence across India with almost 255 plus Shanti Juniors Preschool centers and almost 5 owned and joint venture Shanti Asiatic (K-12 schools) and around 4 Franchised Shanti Asiatic (K-12 schools), as per the annual report for FY21.

For the December quarter of 2021, the company reported net loss of ₹0.63 crore as against net profit of ₹0.18 crore for the period ended September 30, 2021, and a loss of ₹0.01 in the same period last year.

The total income stood at ₹1 crore during Q3 FY22 as against ₹1.43 crore in the previous quarter. The earnings were impacted by suspension of schools over a continued period in wake of the Covid-19 pandemic.

For the financial year 2020-21, the company posted net profit of ₹2.12 crore as compared to ₹0.06 crore in the previous fiscal, while total income dropped to ₹5.93 crore from ₹14.85 crore in the prior year. Adding to it, the company did not declare any dividend this year.