Multibagger Stock: Retail investors’ most favoured small-cap stocks are at the forefront of the recent market sell-off, causing many high-flying stocks to hit multi-month lows, with some even slipping to one-year lows.

Patel Engineering, one of the major infrastructure and construction companies, is one such stock that couldn’t escape from the recent market rout. The stock has tumbled 8% so far this month, reaching ₹47.80 apiece. To be precise, the stock has been on a downward trajectory since July 2024, losing 27.5% of its value to date. From its February 2024 peak of ₹79 per share, it has corrected 40%.

The recent crash has resulted in sharp losses for retail investors, who hold the largest stake in the company. According to Trendlyne shareholding data, retail investors held a 50.2% stake in the company as of Q3FY25, up from 47.4% in the same period last year.

Over this period, the retail investor base has expanded significantly, rising from 2.11 lakh shareholders in December 2023 to 4.29 lakh. Retail investors have collectively lost ₹1,334 crore in the recent crash.

Following the sharp decline in Patel Engineering shares, the company’s market capitalization, which stood at ₹6,699 crore in February 2024, has declined by ₹2,668 crore to its current level of ₹4,031 crore.

Headquartered in Mumbai, the company is a renowned player in the civil engineering construction sector. It specializes in constructing highways, bridges, tunnels, dams, airports, and various other infrastructure projects.

Domestic brokerage firm IDBI Capital, in its latest report, initiated coverage on the stock with a ‘buy’ rating and set a target price of ₹76 per share.

The brokerage’s positive outlook is driven by the company’s strong order book, anticipated inflows from the hydro segment, and strategic diversification across geographical and sectoral lines, which it believes will drive topline growth.

It has also highlighted the company’s robust construction capabilities, backed by extensive experience in executing highly technical and advanced projects, which are expected to play a pivotal role in its growth trajectory.

Additionally, the report notes that the company’s low debt-to-equity (D/E) ratio and improving return ratios reflect its strong financial position.

Still holds multibagger gains

Despite the recent sell-off, the stock has delivered stellar returns, remaining up by 265% over the last two years. After experiencing persistent selling pressure from January 2022 to February 2023, which led to a 50% decline, the stock reversed its trajectory in the following months and sustained its upward momentum over the next 12 months.

Moreover, from its March 2020 low of ₹7.10 per share, the stock is currently trading with a 585% gain.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.