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This smallcap drilling firm's stock has beaten Coal India, ONGC and Oil India's returns by 10 times

market | Jun 16, 2022 8:36 AM IST

This smallcap drilling firm's stock has beaten Coal India, ONGC and Oil India's returns by 10 times

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Which multibagger stock comes to your mind when you think drilling and mining: Coal India, NMDC, ONGC or MOIL? This smallcap exploration service provider has multiplied investors' money by five times in 12 months.

A smallcap mining and drilling service provider's stock has multiplied investors' money five times in 12 months, almost 10-fold the average return of mining and exploration titans Coal India, ONGC and Oil India. A surge in commodities prices — especially crude oil — has brightened the prospects of these businesses.

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Stock/indexReturn (%)
One monthThree monthsOne year
South West Pinnacle5.97.7408.2
Coal India12.79.921
ONGC-1.5-7.520.8
Oil India2318.981.9
NMDC-16.2-22.7-37
Nifty50-0.6-5.8-0.8
Nifty Smallcap 100-2.1-14.2-11.4

Haryana-based South West Pinnacle Exploration provides commercial services and supplies with a portfolio ranging from groundwater mapping, mineral drilling, coal bed methane production and exploration, and workover rig-related tasks.
South West Pinnacle counts Reliance Industries, Rio Tinto Exploration, Hindustan Zinc, Tata Iron & Steel (TISCO ), De-Beers India, ONGC Energy and Hindalco among its clients.
Analysts are upbeat on the South West Pinnacle stock for its strong order book and diversified service portfolio.
Jitendra Upadhyay, Senior Equity Research Analyst at Bonanza Portfolio, told CNBCTV18.com that the company has an order book larger than its market cap, with return ratios and margins improving quarter after quarter. He believes multiple factors are behind the South West Pinnacle stock's manifold outperformance.
"It provides services to various industries such as coal, ferrous, non-ferrous and atomic minerals, and conventional and non-conventional oil & gas industries, and has a robust client base," he said.
Technical view
After a brilliant run-up, the outlook on South West Pinnacle is slowly turning negative, according to Hemen Kapadia of KRChoksey, who suggests investors to stay away from the stock.
For those already invested, it is prudent to book half if not all the profit for the time being, he said.
"It is very clear that an intermediate top has been made... The stock is moving in a range between Rs 185 and Rs 245 and getting heavy. This probably looks like a distribution pattern and a weekly close below Rs 185 should accelerate its downward journey, which seems to be on the anvil," Kapadia added.
Disclaimer: Network18, the parent company of CNBCTV18.com, is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.
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