Best Penny Stocks With High ROE: In the world of investing, penny stocks are like hidden treasures. They’re often from smaller, less famous companies that could grow a lot. But, they’re also very risky. One of the ways to judge the potential of these stocks is by seeing how much return these stocks have given to their shareholders. In this article, we’ll talk about the 5 Best penny stocks With High ROE, we selected 5 stocks from various industries based on high ROE.
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Best Penny Stocks With High ROE
For our study, we selected 5 stocks from various industries based on high ROE. Without any further delay, let us look at the 5 Best Penny Stocks With High ROE
Best Penny Stocks With High ROE #1 – Rajnandini Metal
Incorporated in 2010, Rajnandini Metal Limited is a pioneer in the manufacture of high-grade copper continuo casting rods.
The company has a manufacturing unit spread over 2 acres of land situated at IMT Bawal solely dedicated to the production of Copper products.
Rajnandini Metal plays a vital role in connecting manufacturers, processors, and yards with customers and traders around the world, serving as a crucial middleman in the business.
| Particulars | Figures | Particulars | Figures |
|---|---|---|---|
| CMP | ₹ 9 | Market Cap | ₹ 254.36 Cr |
| EPS | 0.53 | Stock P/E | 14.33 |
| RoE | 38.52 % | RoCE | 29.22 % |
| Promoter Holding | 73.24% | Current ratio | 1.18 |
| Debt to Equity | 1.74 | Price to Book Value | 5.53 |
| Net Profit Margin | 1.33% | Operating Margin | 1.88% |
The company’s clients include top-tier firms in the steel, automotive, light/heavy engineering, construction, chemical, and electronics industries. It seeks business through high-quality contacts, information, and service.
Currently, the company is expanding its business in 15 countries creating a rigid presence in various segments like recycling industries, steel raw materials, plastics, chemicals, petrochemicals & construction industries.
The company financials show that the company’s revenue has increased tenfold from ₹136.77 crores in FY19 to ₹1,028.88 crores in FY23. Its profits follow a similar trend increasing from ₹1.05 Crores to ₹13.68 Crores.
This gives the company a 4-year CAGR growth of 65.61% and 89.99% on its net revenue and net profit respectively.
In terms of return ratios, its ROE and RoCE were 38.52% and 29.22%, respectively, indicating good returns on shareholder capital and optimal usage of company resources.
The debt-to-equity ratio of 1.74 suggests that the company is on the higher side of the debt.
The average ROE for the last 5 years suggests that the company has given an average return of 24.58% to its shareholders.
Best Penny Stocks With High ROE #2 – Earthstahl & Alloys
Earthstahl & Alloys Ltd. was originally founded in 2009 as a greenfield project for the manufacture of cast iron lumps using the submerged arc furnace method by first-generation entrepreneurs and technocrats with diversified and extensive industrial and commercial experience.
The company specializes in producing cast iron lumps. Additionally, it has established a Lost Foam-based Foundry for the production of high-end ductile iron, cast iron, steels, alloys, and non-ferrous castings.
These are used across various industries, including pellet plants, cement plants, sponge iron plants, and power plants, as well as in the manufacturing of automobiles, railways, mining, agriculture equipment, pipes, and fittings.
| Particulars | Figures | Particulars | Figures |
|---|---|---|---|
| CMP | ₹ 56.0 | Market Cap | ₹ 68.6 Cr |
| EPS | ₹ 6.14 | Stock P/E | 9.13 |
| RoE | 29.6 % | RoCE | 24.9 % |
| Promoter Holding | 73.5 % | Current ratio | 1.62 |
| Debt to Equity | 0.36 | Price to Book Value | 1.93 |
| Net Profit Margin | 8.18 % | Operating Margin | 13.5 % |
If we look at the financials of the company, we can see that the net revenue of the company has increased from ₹39.05 crores in FY19 to ₹91.81 crores in FY23. This gives the company a sales CAGR growth of 23..83% during the period.
Similarly, the company has made a turnaround from a net loss of ₹4.54 crores in FY19 to a net profit of ₹7.51 crores in FY23.
The ROE and RoCE stood at 29.6 % and 24.9% respectively, which suggests good returns to shareholders’ capital and efficient utilization of company resources.
Furthermore, the company’s debt-to-equity ratio stood at 0.36 which means the company primarily uses its own funds to run its operations.
The average ROE for the last 5 years suggests that the company has given an average return of 33.62% to its shareholders.
Best Penny Stocks With High ROE #3 – Raaj Medisafe India
Raaj Medisafe India Limited, incorporated in 1985 and based in Pithampur, Madhya Pradesh, is a company that manufactures and sells plastic bottles, caps, plastic liners, and other related products.
The company’s products are used in a range of industries, including healthcare, food & beverages consumer goods, and industrial products.
The company’s customer base includes some of the leading companies in India, such as Dabur India Ltd, CIPLA Ltd, Shriji Polymers India Ltd, and Lupin Limited.
| Particulars | Figures | Particulars | Figures |
|---|---|---|---|
| CMP | ₹ 39.01 | Market Cap | ₹ 42.67 Cr |
| EPS | 3.06 | Stock P/E | 12.74 |
| RoE | 57.21 % | RoCE | 24.24 % |
| Promoter Holding | 73.45% | Current ratio | 1.34 |
| Debt to Equity | 2.08 | Price to Book Value | 5.23 |
| Net Profit Margin | 8.62% | Operating Margin | 14.52% |
According to the company’s financials, net revenue has increased significantly from ₹4.8 crores in FY19 to ₹38.62 crores in FY23. This gives the company a sales CAGR growth of 68.42% during the period.
Similarly, it has shown a significant improvement from a net loss of ₹1.59 crores in FY19 to a net profit of ₹3.33 crores in FY23.
The ROE of 57.21% and RoCE of 24.24% imply a high return on capital invested by the shareholders and a highly optimum use of the company resources.
On the other hand, the debt-to-equity ratio of 2.08 suggests that the company has a high amount of debt on its balance sheet.
The 5-year ROE of 28.85 % indicates that the company has consistently generated a high average return on the capital invested by its shareholders over the past five years.
Best Penny Stocks With High ROE #4 – Bizotic Commercial
Bizotic Commercial Limited, incorporated in 2016, is a prominent player in the retail and wholesale industry through its successful men’s wear brand. The company is known by its brand URBAN UNITED.
Urban United caters to every aspect of men’s fashion, offering a diverse range for customers with varying preferences and style preferences. It provides services through its retail outlets and e-commerce channels.
With its broad network and wholesale market expertise, it also caters to the requirements of various businesses in the textile industry, providing them with high-quality fabrics for their manufacturing operations.
| Particulars | Figures | Particulars | Figures |
|---|---|---|---|
| CMP | ₹ 58.6 | Market Cap | ₹ 47.1 Cr |
| EPS | 3.35 | Stock P/E | 17.16 |
| RoE | 55.57% | RoCE | 50.09% |
| Promoter Holding | 70.00% | Current ratio | 1.21 |
| Debt to Equity | 0.51 | Price to Book Value | 0.91 |
| Net Profit Margin | 4.13% | Operating Margin | 6.12 % |
Over the past five years, the company has reported significant improvements in its financial statements.
The net revenue of the company has increased 9 times from ₹7.89 crores in FY19 to ₹65.16 crores in FY23. This gives it a revenue CAGR growth of 69.52% during the period.
Similarly, the net profit of the company has increased from ₹0.12 crores to ₹2.69 crores during the same duration. This gives it a CAGR growth of 117.59% on its net profits.
Coming to the return ratios, the company reported a ROE and RoCE of 55.57% and 50.09%, respectively. This suggests a good return to the shareholder’s equity and an efficient use of the company resources.
Furthermore, the debt-to-equity ratio stood at 0.51 suggesting a low debt on the company’s balance sheet.
The company has consistently generated a high average return on the capital invested by its shareholders over the past five years, with a 5-year ROE of 64.11%.
Best Penny Stocks With High ROE #5 – Family Care Hospitals
Founded in 1994 and headquartered in Thane, India, Family Care Hospitals Limited is an establishment driven by Scandent Imaging Pvt. Ltd.
It is a healthcare services organization dedicated to delivering top-notch, cost-efficient healthcare with a strong focus on patient-centred care.
| Particulars | Figures | Particulars | Figures |
|---|---|---|---|
| CMP | ₹ 7.36 | Market Cap (Cr.) | ₹ 38.89 Cr |
| EPS | 0.98 | Stock P/E | 7.34 |
| RoE | 17.51 % | RoCE | 23.2 % |
| Promoter Holding | 18.54% | Current ratio | 2.83 |
| Debt to Equity | 0.09 | Price to Book Value | 0.82 |
| Net Profit Margin | 11.12 % | Operating Margin | 17.71% |
It stands at the forefront in delivering cutting-edge, independent dental and ENT imaging solutions, offering an extensive array of 3D and 2D scanning services complemented by expert reports, tailored to meet the needs of the dental and ENT medical community.
The company financials show that the company increased its revenue from ₹14.19 crores in FY19 to ₹47.3 crores in FY23. During the same period, its profits have increased significantly from a mere ₹0.02 Crores to ₹5.26 Crores.
This gives the company a CAGR growth of 35.12% and 302.71% on its net revenue and net profit respectively.
The company’s ROE and RoCE are 17.51% and 23.2%, respectively, suggesting good returns to shareholders’ equity and the company resources being utilised efficiently.
The debt-to-equity ratio is 0.09, indicating that the company has negligible debt on its balance sheet.
The average ROE for the last 5 years suggests that the company has given an average return of 24.18% to its shareholders.
Conclusion
As we conclude our article on ‘Best Penny Stocks With High ROE’, we can say that ROE can be used as a parameter for assessing a company’s potential.
However, it’s not advisable to invest in penny stocks solely based on the return on equity. Investors should keep a close eye on these stocks and continuously monitor their results and news as they come with huge risks.
Written By Aaron Vas
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