2x returns in 2 months: Is this stock a powerhouse or just a passing fancy?

It happens every so often that investors are swept off their feet in a love affair that is quick, gushing and eccentric. Case in point, Manorama Industries and its gobsmacking rally. The small-cap company's share price nearly doubled in less than two months! Its P/E ratio mounted a high of 102 times from 52 times between March 15 and April 26, 2024. This is despite its vapid ROCE of less than 15 per cent. So, why does it still have such a hold on investors? Find out in our analysis: The business If you ever ate a Ferrero Rocher chocolate or used Loreal's cosmetics, you likely consumed butter made by Manorama Industries. The company primarily produces cocoa butter equivalent (CBE), a synthetic substitute of cocoa butter, used in confectionery, chocolate items and cosmetic products. It procures exotic tree-borne seeds such as mango, kokum, and mowrah from India and shea from Africa to produce CBE and other specialty fats and butters. These seeds are extracted and processed at its Raipur plant. The company's client base includes renowned brands like Modelez, Ferrero Rocher, Loreal, Hershey's, etc. Exports make up a big chunk of the business, contributing around 43 per cent to its FY24 revenue. The growth meter Manorama's days of glory followed a period of defeat. The