Penny stocks often carry a reputation for high risk and volatility, however, financially strong penny stocks are low-priced shares of companies that demonstrate robust financial health, stable earnings, and strong growth prospects.
Key characteristics and metrics of fundamentally strong penny stocks include positive profitability, return on equity, return on capital employed, net profit margin, operating margin, and net income, among other favourable financial attributes.
Here are a few financially strong penny stocks that have recently released financial results for Q1 FY24-25:
PMC Fincorp Limited
With a market capitalisation of Rs. 265.4 crore, the shares of PMC Fincorp closed in the green at Rs. 4.9 in the trading session of Thursday, against its previous closing price of Rs. 4.81.
Financially, the company experienced significant growth in its revenue from operations, showing a year-on-year rise of around 198 percent from Rs. 2.7 crore in Q1 FY23-24 to Rs. 8.05 crore in Q1 FY24-25.
Similarly, its net profit increased during the same period from Rs. 1.8 crore to Rs. 5.8 crore, indicating a growth of 222 percent YoY.
In FY23-24, the company achieved a positive return on equity (ROE) of 9.85 percent, rebounding from a negative 6.15 percent in FY22-23. Similarly, the Return on Capital Employed (RoCE) improved from a negative 4.75 percent in FY22-23 to a positive 12.2 percent in FY23-24.
PMC Fincorp achieved a remarkable turnaround in its financial performance, with a net profit margin surging to 72.92 percent in FY23-24 from a negative 70.47 percent in FY22-23. Similarly, the operating margin saw a substantial improvement, rising to 90.86 percent from a negative 53.11 percent over the same period.
According to June 2024 shareholding pattern, the Promoters hold a 20.03 percent stake in the company, and Retail Investors hold a 79.97 percent stake in PMC Fincorp.
Over the past one year, the stock has delivered multibagger returns of nearly 206.3 percent, and about 59.6 percent of positive returns year-to-date.
PMC Fincorp Limited is a Non-Banking Financial Company Not Accepting Public Deposits registered with the Reserve Bank of India (RBI) and is primarily engaged in financing and investment-related activities.
DRC Systems India Limited
With a market capitalisation of Rs. 395 crore, the shares of IT and Software Consultancy Services were trading at Rs. 29.83 in the trading session of Friday, as against its previous closing price of Rs. 30.43.
Financially, the company experienced significant growth in its revenue from operations, showing a year-on-year rise of around 120 percent from Rs. 7 crore in Q1 FY23-24 to Rs. 15.4 crore in Q1 FY24-25.
Similarly, its net profit increased during the same period from Rs. 1.1 crore to Rs. 3.8 crore, indicating a growth of 245.4 percent YoY.
The company’s return on equity (ROE) stood at 24.36 percent in FY23-24, up from 19.53 percent in FY22-23, while Return on Capital Employed (RoCE) grew from 24.75 percent in FY22-23 to 24.9 percent in FY23-24.
The company reported a net profit margin of 24.34 percent in FY23-24 decreasing from 26.54 percent in FY22-23 and an operating margin of 25.95 percent falling from 34.66 percent, over the same period.
According to the June 2024 shareholding pattern, the Promoters hold a 22.44 percent stake in the company, Foreign Institutional Investors (FII) hold a 0.38 percent stake, while Retail Investors hold a 77.18 percent in DRC Systems India.
Over the past one year, the stock has delivered multibagger returns of nearly 134.4 percent, as well as 111.2 percent returns year-to-date.
DRC Systems India Limited is an IT services and Consultancy Company in India focused on providing viable and lasting solutions to businesses.
Capital Trade Links Limited
With a market capitalisation of Rs. 358.7 crore, the shares of Capital Trade Links opened at Rs. 58.83 on Friday, as against its previous closing price of Rs. 61.92.
Financially, the company experienced a fall in its revenue from operations, showing a year-on-year decline of around 8.5 percent from Rs. 7.08 crore in Q1 FY23-24 to Rs. 6.5 crore in Q1 FY24-25.
However, its net profit increased during the same period from Rs. 1.3 crore to Rs. 2.7 crore, indicating a growth of 100 percent YoY.
The company’s return on equity (ROE) stood at 17.62 percent in FY23-24, up from 6.48 percent in FY22-23, while Return on Capital Employed (RoCE) grew from 20.9 percent in FY22-23 to 46.3 percent in FY23-24.
The company reported a net profit margin of 27.28 percent in FY23-24 increasing from 14.86 percent in FY22-23 and an operating margin of 78.77 percent rising from 50.47 percent, over the same period.
According to the March 2024 shareholding pattern, the Promoters hold a 40.33 percent stake in the company, and Retail Investors hold a 59.67 percent stake in Capital Trade Links.
Over the past one year, the stock has delivered multibagger returns of nearly 126.4 percent, and about 69.3 percent of positive returns year-to-date.
Capital Trade Links Limited is a Non-deposit-taking, Non-Systemically Important NBFC registered with the Reserve Bank of India (RBI). It is engaged in the business of providing personal loans, auto loans, business loans and consumer durable loans to enterprises from all spectrums.
Written by Shivani Singh
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