Ruchi Soya soared 90 times in 5 months; should you buy?

Shares of hit a life-time high of Rs 1,519, on the BSE today. The stock has soared nearly 90 times or 8,988 per cent from the level of Rs 16.90 touched on January 27, 2020 –when it was re-listed on the stock exchanges.

The group acquired Ruchi Soya for around Rs 4,500 crore in September 2019 and owns a 98.87 per cent stake in the company. As on March 31, 2020, promoters held 99.03 per cent stake in The public shareholders held just 0.97 per cent holding.

A sharp rally in the stock price of has helped the company enter into the list of top-100 most-valued companies by market capitalisation (m-cap), overtaking the FMCG major Marico.

Today the stock declined 5 per cent to Rs 1,443 post March quarter earnings. Ruchi Soya reported a net losss of Rs 41 crore in the quarter ended March 2020 as against net profit of Rs 32 crore during the previous quarter. However, sales rose 1.42 per cent to Rs 3,190.96 crore in the quarter ended March 2020.

What’s the reason behind the meteoric rise in the Ruchi Soya stock and whether or not you should buy it at its current market price?

Listen to the Podcast to know what Nikhil Kamath, Co-founder and chief investment officer at True beacon and Zerodha said