Exceptional Market Returns Outpacing Benchmarks
The stock’s recent rally is underscored by its remarkable returns relative to key market indices. Over the past week, Sizemasters Technology surged by 25.02%, vastly outperforming the Sensex’s modest 0.56% gain. This momentum extends over longer periods, with the company’s one-month return at 42.99% compared to the Sensex’s 1.27%, and a year-to-date return of 51.45% against the benchmark’s 9.68%. Even on a one-year basis, the stock has appreciated by 50.73%, significantly outstripping the Sensex’s 8.43% rise. Such consistent outperformance highlights strong investor appetite and confidence in the company’s growth trajectory.
Strong Technical Indicators and Investor Participation
On the trading day of 28-Nov, Sizemasters Technology opened with a gap up of 4.98%, signalling positive market sentiment from the outset. The stock reached an intraday high of ₹206.70, maintaining gains throughout the session. Notably, it is trading above all key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages, which is a bullish technical indicator suggesting sustained upward momentum. Furthermore, investor participation has increased, with delivery volumes on 27-Nov rising by 47.61% compared to the five-day average, indicating heightened buying interest and confidence among shareholders.
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Robust Financial Performance Fuelling Investor Confidence
The company’s strong fundamentals provide a solid foundation for its share price appreciation. Sizemasters Technology boasts a high return on equity (ROE) of 18.42%, reflecting efficient management and effective utilisation of shareholder capital. Its low average debt-to-equity ratio of 0.07 times further underscores financial prudence and limited leverage risk. The firm has demonstrated impressive long-term growth, with net sales expanding at an annual rate of 78.89%, signalling robust demand and operational scalability.
Recent quarterly results have been particularly encouraging. The company reported a staggering 264.47% growth in net sales, reaching a quarterly high of ₹12.72 crores. Operating cash flow for the year peaked at ₹3.19 crores, while profit after tax for the first nine months rose to ₹2.97 crores. These positive results mark the second consecutive quarter of strong financial performance, reinforcing the company’s growth narrative and attracting investor interest.
Market-Beating Returns and Promoter Confidence
Sizemasters Technology’s stock has delivered market-beating returns, generating 50.73% over the last year compared to the broader BSE500 index’s 5.87%. This substantial outperformance is a testament to the company’s growth potential and operational strength. The majority shareholding by promoters also provides stability and alignment of interests, which can be reassuring for investors seeking long-term value.
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Valuation Considerations and Risks
Despite the strong performance, investors should be mindful of the company’s valuation metrics. The stock trades at a price-to-book value of 12.5, which is considered very expensive relative to its own historical valuations, although it remains at a discount compared to peers. The price-to-earnings growth (PEG) ratio stands at 2.9, indicating that while profits have risen by 22% over the past year, the stock price has increased at a faster pace. This elevated valuation suggests that the market has high expectations for continued growth, which may introduce some risk if future results do not meet these projections.
Nonetheless, the company’s strong fundamentals, consistent earnings growth, and market-beating returns provide a compelling case for the recent rise in its share price. Investors appear to be rewarding Sizemasters Technology for its operational efficiency, robust sales growth, and positive quarterly results, which collectively underpin the stock’s upward trajectory.
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