Penny stocks are a great investment option for those investors who have a minimal budget and a high-risk appetite. Generally, they are available for prices below ₹ 10 and are highly illiquid.
It takes a good understanding of financials and a lot of research to find penny stocks that give multibagger returns. Even then, some of them soar high, while others tend to wipe away the capital that is invested in them.
Chemcrux Enterprises is a small-cap company that has delivered multibagger returns of 4,194.21 per cent as its share price increased from ₹ 9.50 to ₹ 407.95 in the past five years. In other words, it has multiplied investors’ returns by 42.94 times. If an investor would have invested in the company’s shares five years ago, the value of their holdings would have been ₹ 42.94 lakhs today!
The company produces chemical products like drug intermediates like benzoic and aceturic acids, lassamide, sulfonamide, and others. It excels in high-pressure oxidation, nitration, acetylation and chlorosulfonation chemistry.
Chemcrux Enterprises’ shares are listed on the Bombay Stock Exchange (BSE). It has a market capitalization of ₹ 588 crores and has an excellent return on equity of 31.20 per cent.
Its shares were trading at a price-to-equity ratio (P/E) of 33.80, which is significantly higher than the industry P/E of 14.23, indicating that the stock might be overvalued. Its promoters hold a 72.94 per cent stake in the company, while retail investors hold 27.06 per cent.
Written by Simran Bafna
Disclaimer
The content in this news article is not investment advice. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Dailyraven Technologies or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
