Rs 48,650! Is it worth investing in India's costliest stock?

It’s a potential Kaun Banega Crorepati question: What is the name of India’s costliest share? No, it’s not Infosys, Reliance Industries, Coal India or even Tata Consultancy Services (TCS).

Actually, the answer is a four-letter word: “OMDC”.

Better known as Orissa Mineral Development Company, it is India’s most expensive stock, quoting at an astounding price of Rs 48,650 per share as on 3 November. The stock was first brought to our notice by a Business Line report .

[caption id=“attachment_122597” align=“alignleft” width=“380” caption=“For the year ended March 2011, the company reported a profit of Rs 7.72 crore on a turnover of Rs 44.8 crore, hardly anything to talk about. Reuters”] [/caption]

If that sounds unbelievable, here’s another amazing fact: the stock is quoting at a significant discount to its 52-week high of Rs 92,200 (15 Nov 2010) -almost 40 percent lower. Incidentally, that is also its life high.

Is it worth buying the stock at current prices? Its financial performance does not encourage that idea. For the year ended March 2011, the company reported a profit of Rs 7.72 crore on a turnover of Rs 44.8 crore, hardly anything to talk about.

Since its paid-up capital stood at a mere Rs 60 lakh, its earnings per share (EPS) comes to a steep Rs 125.5 for the year ending March 2011.

At the annual general meeting held by the company on 16 September, AP Choudhary, chairman, said the company could not capitalise on the rising trend in mineral prices because of the closure of mines caused by the non-availability of statutory forest and environmental clearances. However, he expects 2012-13 to be a better year if the clearances expected for mining go through.

Dalal Street Investments ranks it as India’s second-most expensive stock, with a price of Rs 22,182 per share as on 17 October (last traded date).It reported a net loss of Rs 1.84 crore on revenues of Rs 30 lakh for the year ended March 2011.