Penny stocks are relatively inexpensive. While they lack liquidity in their stocks, they also have low market capitalizations.

Such stocks are more susceptible to market-changing conditions. Many investors avoid these stocks due to their poor fundamentals and unreliable businesses. Some penny stocks, on the other hand, are recognized for producing multi-bagger returns.

Here are the 2 small cap stocks which provided Multibagger returns

Pulsar International Ltd

On May 23, 2023. The shares of Pulsar International Ltd., trading at ₹107.65 on the BSE, touched a lower circuit of 5 percent from their previous close of ₹ 113.30.

In the last six months, the company’s share price increased from ₹ 2.49  to ₹ 107.65 giving multibagger returns of 4,423%. Therefore, if an investor had invested ₹ 1 lakh in the company’s shares in the last six months, the value of their holdings would have been ₹45.23 lakhs today!

The company is engaged in dealing in mutual fund units.

Having a quick walkthrough of the financials reported by the company, On a YoY comparison of the metrics, the revenues increased from ₹ 0.05  crores during FY 20-21 to ₹0.09 crores in FY 21-22. The PAT reported a loss of ₹ 0.06  crore in FY21 and   0.07 crore in FY22. 

The company has a market capitalization of ₹ 32 crore and reported a negative return on equity of 1.83% and a zero debt-to-equity ratio as of FY22. 

Standard Capital Market Ltd.

On May 23, 2023. The shares of Standard Capital Market Ltd., trading at ₹83.00 reached an intraday high of ₹ 89.20 apiece from the previous close price of  ₹ 87.25.  on the BSE and touched a lower circuit of 3.61 percent.

In the last six months, the company’s share price increased from ₹ 6.22   to ₹ 83.00 giving multibagger returns of 1234.41 %. Therefore, if an investor had invested ₹ 1 lakh in the company’s shares in the last six months, the value of their holdings would have been Rs. 13.34 lakh today!

Standard Capital Market is a nonbanking financial company that provides a range of financial services, which include lending money to individuals and small and medium enterprises, with or without security, dealing in securities/shares of companies, bonds, and unit investments in stock markets.

Having a quick walkthrough of the financials reported by the company, On a YoY comparison of the metrics, the revenues increased from ₹ 0.32  crores during FY 20-21 to ₹0.37 crores in FY 21-22. The PAT reported a loss of ₹ 0.70  crore in FY21 to a profit of  ₹ 0.08 crore in FY22. 

The company has a market capitalization of ₹406 crore and reported a return on equity of 2.41%, and the debt-to-equity ratio stood at 1.31 as of FY22. 

Due to the illiquidity of penny stocks, only a small number of orders can result in an exchange’s circuit limit being reached. We urge individual investors to conduct thorough research on high-return penny stocks before buying since they lack consistency in performance and ultimately make high risky stocks for retail investors.

Written By Omkar C

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