Undervalued Microcap Stock.
Can this stock become 2x multibagger in 2 years?
Techno-Funda Analysis below: 👇
(1) About company:
Rockingdeals Circular Economy Limited, previously Technix Electronics Limited, is a B2B recommerce company that deals in bulk trading of surplus, open-box, and refurbished items.
Founded in 2002, it began its operations in 2005, providing products such as home appliances, apparel, and electronics.
(2) Sector & Industry outlook:
- Global recommerce market is expected to reach $355 billion by 2025, growing at an annual rate of 21%.
- Infogence Global Research estimated India's re-commerce market at USD 29.54 billion in 2022, forecasting a yearly growth of 6.15% by 2027.
- Grant Thornton report states that India's refurbished furniture and appliance market, valued at $5.7 billion in 2020, is predicted to reach nearly $9.8 billion by 2025.
- Refurbished electronics market was valued at about US$ 5 billion in March 2021 and is expected to reach US$ 11 billion by March 2026, showing a growth of over 2x in five years, with an annual growth rate of around 17%.
(3) Company's future outlook:
- Company targets a 100% annual growth rate.
- Company believes the second half of the year will outperform the first, and next year will show even more growth.
- Business plans to open 100 franchise stores over the next two years as part of its retail expansion.
- Expanding middle class and increased internet usage create opportunities for re-commerce platforms in India, where customers look for cost-effective alternatives to new products.
- Company plans to enter new regions to expand its customer reach.
- Company is branching out into new product categories such as furniture, IT and telecom, and FMCG goods close to expiry.
(4) Company's OEM partners:
(5) Company is growing its reach and building brand awareness through social media.
(6) Company's diversified market segments:
(7) Preferential allotment:
Company issued 5,98,650 shares at Rs. 535, and now the share price is Rs. 600.
(8) Financial Metrics:
■ CMP: 600
■ Mcap: 340 crores
■ TTM PE: 48
■ ROCE: 69%
■ ROE: 75%
■ D/E Ratio: 0.00
■ OPM: 18.89%
■ NPM: 10.5%
■ Promoter holdings: 65%
■ 3 years sales, profit growth: 67% and 374%
(9) Chart overview:
Stock is in a sideways pattern.
Once breakout the upper range, we can expect big move on the upside.
PS: Not a buy/sell recommendation. Please do your own due diligence before investing.
That's a wrap!
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