From ₹5 to ₹136: Penny stock turns multibagger in 9 months despite any major trigger

Vuenow Infratech, a lesser-known IT Infrastructure as a service (ITaaS) provider company, has witnessed significant rally in the calendar year 2024, with the share price spiking from ₹5.5 on January 1, 2024, to fresh all-time high of ₹136.55 today. Despite any major trigger, the Noida-based company has delivered multibagger results in 9 months and has consistently hit the upper circuit for the last five months. This means if one had invested ₹1 lakh in Vuenow on January 1, 2024, it would have risen to around ₹25 lakh by now.

The BSE-listed microcap stock has maintained an uptrend for the last five months since April 24, consistently hitting a 2% upper circuit limit on a daily basis. On Tuesday, the IT stock was locked at the 2% circuit limit at ₹136.55, with a market capitalisation of ₹316.82 crore.

In the last one year, Vuenow Infratech shares have risen 2,500%, while it rallied nearly 1,300% in the past six months and 50% in a month. The counter has zoomed 5,700% since its inception in March 2023. Technically, Vuenow Infratech turned ‘Bullish’ from ‘Mildly Bullish’ on September 3, 2024, indicating a positive outlook for the stock and a potential increase in price.

The stock is under ESM (Enhanced Surveillance Measure) Stage 2 surveillance and trades under a Trade to Trade (T2T) mechanism, with daily price bands of 2% (either way). It is notable that the shortlisting of securities under ESM is not an adverse action against the company, but rather a market surveillance measure to raise awareness and protect investors when dealing with these stocks.

For the first quarter ended June 30, 2024, Vuenow Infratech posted a significant rise in both revenue and profit on yearly basis, but the top and bottom line showed a dip when compared to the previous quarter. 

The company posted revenue of ₹13.24 crore in Q1 FY25 as compared to ₹0.18 crore in the year ago period and ₹28.51 crore in Q4 FY24. Similarly, the profit stood at ₹3.89 crore versus ₹0.09 crore in Q1 FY24 and ₹4.04 crore in the March quarter of FY24. The operating income was at ₹5.29 crore as against ₹0.13 crore in same period last year and ₹5.46 crore in Q4 FY24. The earnings per share (EPS) for Q1 stands at ₹1.68, marking a 3260% YoY increase.

In the past 12 months, Vuenow Infratech has declared an equity dividend amounting to ₹0.75 per share, including ₹0.25 apiece in June 2024 and ₹0.50 apiece in April 2024. At the current share price, the dividend yield stands at 0.55%.

As per the information available on the company’s website, Vuenow provides data warehousing and IT services to industries dealing in different domains. The company aims to be among the top 3 data centre players in the industry in India and plans to build the country’s largest edge compute network by location by 2024. It plans to operate 92 Tier 4 data centres and 150,000 edge data centres by 2030.  

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