This Unknown Small-Cap Delivered 175% Returns in 2023 – Does it Have More Legs in 2024?

Dhaneshwar Prasad

Vivanta Industries, a relatively obscure small-cap company, was one of the standout penny stocks of 2023 generating outsized returns for investors. The stock delivered an impressive 175% gain rising from ₹1.63 to ₹4.52 on the back of positive triggers.

However, after peaking in early 2023, Vivanta has corrected and consolidated in a trading range. As we step into a new year, can this under-the-radar small-cap resume its uptrend or will the rally fizzle out?

Revisiting Vivanta’s Spectacular Run in 2023

Vivanta Industries took investors by surprise in 2023 with its gravity-defying rally. Here are some highlights of its performance:

  • The stock surged 175% YTD, marking it as one of the top small-cap gainers of 2023.
  • Daily trading volumes jumped 10X from 5,000 shares to over 50,000 shares highlighting heightened investor interest.
  • Market cap increased 2X from ₹25 crore to ₹56 crore, creating significant wealth.
  • The stock hit a 52-week high of ₹6.93 in April before sliding into a consolidation range thereafter.

Such an exponential rally in an unknown small-cap without mainstream coverage is rare. Vivanta was clearly a hidden gem that investors discovered in 2023.

Key Drivers Behind Vivanta’s Bull Run in 2023

A combination of factors provided tailwinds for Vivanta Industries’ sensational run:

  • Robust financial performance with sales and profit growth exceeding 50% in FY2023.
  • Expansion plans increasing manufacturing capacity 3X by FY2024.
  • New customer acquisitions across food, pharma and chemical verticals.
  • Technically, the stock saw a breakout from its long-term downtrend.
  • Attractive valuations at less than 5X earnings despite the surge.
  • Increased retail and HNI interest given its small size and low price.

Vivanta’s expanding business fundamentals combined with positive technical and sentiment triggers provided the perfect launchpad for its 175% small-cap rally.

Outlook and Prospects for 2024

After its euphoric rise, Vivanta has mostly trended sideways in a ₹3-5 trading range since July 2022. As we enter 2024, here are the potential scenarios:

Bull case

Vivanta delivers another year of 40%+ growth in sales and profits. The capacity expansion goes as per plan. This results in the stock breaking out and climbing another 60-70%.

Bear case

Execution delays, client additions fall short of estimates, input cost inflation impacts margins. Disappointing financial performance causes the stock to slide back towards its 200-day moving average near ₹3.

Most likely outcome

Vivanta achieves around 30% top and bottom-line growth in FY2024, moderately outpacing expectations. The stock trends higher in a gradual trajectory to potentially hit ₹6-7.

Final Verdict

Vivanta Industries provided a case study in 2023 on how obscure penny stocks can deliver outsized returns once discovered. While further upside is likely, expectations need to be managed after the 175% rally.

Investors should accumulate Vivanta on dips for a 30-50% potential upside over 12 months. Despite risks inherent in small illiquid stocks, this remains an attractive turnaround story entering 2024 after a prolonged consolidation.

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Former Sony professional turned multi-business owner and stock investor, Dhaneshwar leverages his MBA to produce market, IPO and biz content and personal investments on
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