Last 1 year the market has been tough. However, when market consolidates for a long period of 2-3 years, it sets the base for the next bull run and it’s important one should be ready with good stocks in the portfolio for the bull run.
Today, we will look at how to screen for turnaround opportunities that can turn out to be multibaggers.
We believe one good way to screen for such stocks is as follows:
Look for Preferential allotment of warrants/shares to Promoters/Insiders in companies in which there’s been a decent correction in stock price (40-50% or more) and the major or the entire allocation is to Promoters/Insiders.
Let’s look at a case study – Ashapura Minechem.
Before that: Here’s the list of new recommendations released in last few weeks:
- On 14th Sep’25, we released our 5th stock report under “Insider Bets“ subscription. Herein the company’s performance has turned around with strong growth in PAT in FY 25 and management is targeting PAT margin to improve 3x. You can read about it by clicking HERE
- On 1st Sep’25, we released a new Special situation opportunity for our Alpha + members. It’s based on buy-back with upside potential of around 20% from our recommended levels (assuming full acceptance). You can read about it by clicking HERE
Ashapura Minechem case study
- From FY 16 till FY 20, the company’s sales and profits were dropping year after year
- Sales had decreased from Rs 1,700 crore + to only Rs 334 crore and stock price had fallen from 113 odd levels in Jan’18 to 17 odd levels in Jul’19
- On 7th Jan’20, company announced that a meeting of Board of Directors will be held on 10th Jan’20 to consider allotment of 45 lakh Preferential warrants to Promoters. In Jan’20, the stock was quoting around 30 odd levels
- On 28th Feb’20, the company allotted 45 lakh convertible warrants @ Rs 31.95/- each to Promoters
- At this time, while there was no sight of turnaround in business, it was still an interesting event as Promoters were willing to take a bet despite the business being down
Source: Screener
- While FY 20 ended with just Rs 334 crore sales, in FY 21, the sales increased to Rs 1,148 crore
- Probably, the promoters were anticipating a turnaround in the business and thus opted for convertible warrants at Rs 31.95/- each
- The markets also turned supportive and the stock went up to 150 odd levels by Apr’21
- After recording a high of around 165 odd levels in Apr’22, the stock again started correcting and reached lows of 75 odd levels in Dec’22
- On 28th Dec’22, company announced that a meeting of Board of Directors will be held on 2nd Jan’23 to consider allotment of 40.4 lakh Preferential warrants to Promoters
- On 14th Feb’23, the company allotted 40.4 lakh convertible warrants @ Rs 95.96/- each to Promoters
- Markets again turned favorable and the stock touched a high of 500 + in Jan’25
There might be many cases where the business and the stock may not have done well, post allotment of warrants to promoters during low phase. However, the idea is, screening for such stocks can be a good starting point for further research and to catch the turnaround stage early.
Hope you found the blog post useful and it added value to your investment decisions. Sign up for more interesting stock ideas and industry notes.
Disclaimer: This is not a recommendation to buy/sell any of the stocks mentioned above. The securities quoted are for illustration only and are not recommendatory.
Ekansh Mittal
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