Indeed BCL industries and infrastructure has been performing extremely well in the past 5 years. Its stock has climbed by more than 970 percent with market cap increasing from Rs 22 crore to Rs 264 crore. This alone should be sufficient to pull investors to this leading agro-based edible oil company in India.
But here’s a thing—just because it has been performing well over the course doesn’t vouch it would do just as well in the coming months and years. The problem with small cap stock is that even when they are rising – and rising fast, at that – the return for you would still remain small, unless you hold a big stake at the company, which comes with much higher risk. For example, in previous year, BCL Industries clocked just Rs 0.85 crore in net profit.
Yes, invest in this company, but don’t expect to grow your riches very soon. If you’re a long-term investor, it is a nice bet for your portfolio. If not, you’re better off with some other option. Also, even if you’re a long-term player, before putting your money in BCL industries, do a thorough market research. Agro-based industry is very sensitive to government policies. And given the approaching 2019 general election where we can see the change of government, things could turn boring for these small cap investors.