One of the top-performing micro-cap stocks, Varyaa Creations Limited, has surged by 100% in the past 60 days, reflecting strong investor confidence. The company reported stellar financials with revenue tripling and net profit growing 2.8x year-over-year (YoY).
Share Price Movement
The share price of Varyaa Creations hit a new high of ₹144.50 on October 16, 2024, marking an impressive rise from its 52-week low of ₹61.1 per share. Over the past two months, the stock has doubled, delivering exceptional returns to its shareholders. As of October 22, 2024, the company’s market capitalisation stands at ₹60.3 crore.
What Led to the Surge?
Varyaa Creations posted outstanding financial performance in the fiscal year 2024, which spurred the bullish movement. Its revenue from operations soared by 309% YoY, increasing from ₹522.7 lakh in FY23 to ₹2,139.93 lakh in FY24. Additionally, the company’s net profit skyrocketed 208% YoY, rising from ₹78.93 lakh in FY23 to ₹301.88 lakh in FY24.
The earnings per share (EPS) dropped from ₹52.62 in FY23 to ₹8.75 in FY24 due to changes in the company’s capital structure following its public listing. However, return on equity (ROE) reached an impressive 83.54%, while the return on capital employed (ROCE) climbed to 111.65%, highlighting the company’s efficient capital use.
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Shareholding Pattern and Company Profile
As of September 2024, promoters hold a majority stake of 72.03%, with the remaining 27.97% of shares held by public investors. Varyaa Creations, originally incorporated as Kalgi India Private Limited in 2005, rebranded to its current name in 2016. The company transitioned into a public entity in 2023 and launched its initial public offering (IPO) that year, raising ₹20.10 crore through a fresh issue of 1,340,000 equity shares at a face value of ₹10 each.
Varyaa Creations operates in the precious metals sector, trading gold, silver, and gemstones, including both precious and semi-precious stones. As part of its strategic expansion, the company is focusing on developing and promoting jewellery under its brand. It outsources production to job workers in Mumbai, maintaining an asset-light business model.
The company’s IPO received a warm response from the market, with overall subscription reaching 3.59 times on the fourth day. The retail segment was oversubscribed 6.09 times. while the non-institutional investors (NII) portion saw 1.08 times subscription, indicating strong retail interest.
Promoted by Sarika and Pooja Naheta, who possess over two decades of experience in the jewellery and stone industry, Varyaa Creations is well-positioned for future growth. The company’s focus on product quality and market expansion reflects the promoter’s deep expertise and industry insights.
Written By Fazal Ul Vahab
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