It should be noted that some of these stocks have very small market capitalizations, weak or uneven earnings trends, and short-term sharp swings. For investors, the absence of debt is the only comfort. It does not eliminate business risk, valuation risk or liquidity risk.
Penny Stock Winning Checklist
Oxford Industries was the top performer in the screen, growing 1,126% over the past year. The stock last traded at Rs. traded at 9.56 and has zero debt-to-equity on an annualized basis. The company belongs to textile, apparel and accessories sector and has a market cap of just Rs. 5.7 crores. Its PE ratio was 10.86. However, quarterly revenue growth was down 100% year-on-year (YoY), while net profit rose just 0.92%. The stock has also improved 33.98% over the past quarter and 15.32% over the past week.
Antriksha Industries was the second biggest gainer, rising 629% in one year to a 10-year high. Realty share Rs. 9.77 and its market cap was only Rs. 0.2 crore was. Its quarterly revenue fell 98.19% year-on-year and net profit fell 23.97%. The stock is still up 629.1% for the quarter and 15.62% for the week, reflecting the intense price action often seen among micro-cap counters.
Also Read: 12 Penny Stocks Plunge Up To 80% In 6 Months Are you affected?
Brightcom Group has grown 376% in the past one year. The software and services company has Rs. 9.52 and compared to others in the list at Rs. 1,922 crore market cap was huge. Its PE ratio was 2. The company reported 62% YoY growth in quarterly revenue and 72.22% growth in net profit. However, the stock is down 4.03% for the quarter and 4.51% for the week.
RGF Capital Markets rose 276% in one year to a five-year high. Banking and Finance share Rs. Traded at 2.37. It reported 314% growth in quarterly revenue and 57% growth in net profit. But its PE ratio stood at 790, indicating a stretched valuation. The market cap of the company is Rs. 36 crores.
Indo Credit Capital has grown by 218% in the past year. Share Rs. 9.43 and its PE ratio was 112.16. Revenue was up 4.91% year over year in the quarter, while net profit was down 4.02%. The stock is down 8.09% this quarter, though it was up 15.42% over the past week.
BMB Music grew 164% in one year. Media Share Rs. 4.1 crore with a market capitalization of Rs. Traded at 6.8. Revenue grew 50% year-on-year, but net profit fell 115%, pointing to pressure on the bottom line.
Achyut Healthcare has grown by 118% in the past year. Pharmaceuticals and Biotechnology share Rs. was traded at 7.97. Revenue rose 376% in the quarter, but net profit fell 53.29%. Its PE ratio was high at 654.35, while the market capitalization was Rs. 192.4 crores.
Smiths & Founders is up 81%, CFSL is up 63% and Signature Green Corporation is up 53% over the past year. Smiths & Founders reported a 67% profit growth, while CFSL’s profit grew by 219%. However, Signature Green reported a 268% drop in net profit.
These stocks have one common feature, which is zero annual debt-to-equity. It can be positive as companies with no debt do not face interest burden and repayment pressure. This becomes more relevant when interest rates are high or business conditions are uncertain.
Still, analysts say extra caution is warranted in penny stocks. Low cost does not mean low risk, as many such companies have small market caps, low liquidity and volatile earnings. A small buy or sell order can cause the price to rise sharply. Some of the stocks on the list have delivered big one-year returns despite weak quarterly revenue or profit.
(Disclaimer: Recommendations, suggestions, opinions and views given by experts are their own. These do not represent the views of Economic Times)
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