Source Natural, earlier known as Invinex Laboratories, was supposedly into pharmaceuticals products. It later changed its name to Source Natural Foods and Herbal Supplements Limited to manufacture foods and ayurvedic products, now in fashion. It apparently sells herbal products and supplements. On contacting the company, we learnt that it sells a product called Ojasvita, a milk powder that comes in three flavours, and another product, called Shakti drops, supposed to be some kind of energy drops to be added to water and taken as nutrients. These products are not sold directly, but can be bought through a website intriguingly called srisriayurveda.com.
The company claims to have sold these two products worth Rs10.93 crore in FY15-16 and made net profit worth Rs43 lakh. It has total assets of Rs6.62 crore; reserves and surplus is negative, at Rs88 lakh. In the past five years, the company has managed to achieve an average sales growth of 89.27%, but on a tiny base. In many quarters, it has either made no profits or has made a loss. Even with such strange fundamentals, the stock rose by 868%, to Rs115.25 on 21 February 2017 from Rs11.9 on 3 January 2015. The P/E is 80.84. A hot growth stock or manipulated scrip? We will never know because the regulators are somnolent.
Maha Rashtra Apex Corporation Limited claims to be into leasing, hire purchase and bill discounting services. It has nine branches and one franchisee across the country. Over the past several years, the company has made no significant sales, barring in one year, and has been making huge operating losses. These losses get reduced at the net loss level because of the other income it receives.
This other income is the interest received on bank deposits. For FY15-16, sales were Rs1.26 crore whereas the operating loss was Rs6.84 crore. Net loss stood at just Rs8 lakh because of other income —of Rs9 crore. However, the stock has moved by 3702% in two years, from Rs3.68 on 17 March 2015 to Rs139.9 on 3 February 2017. Why? Maybe Securities and Exchange Board of India (SEBI) can tell, if their expensive surveillance system is working.