Fundamentally strong companies are those that have strong financials over the years, such as significant profit growth, a low debt-to-equity ratio, and continuous cash flow.
Penny stocks belong to the inexpensive category, with low market capitalizations and limited liquidity in their stocks. Those stocks are more volatile in nature.
Listed below are three fundamentally strong Penny Stocks
Madhav Infra Projects Limited is engaged in the business of infrastructure development and solar power generation.
Madhav Infra Projects Ltd belongs to the penny stock category, with a market capitalization of Rs 157 crore. The company’s shares were trading at Rs 5.85 per share on Friday, up 0.70 percent from the previous close.
The Company’s return on equity increased from 6.40 percent in FY22 to 21.68 percent in FY23, while the return on capital employed rose from 11.51 percent to 22.12 percent during the same period. while the company’s net profit margin improved to 7.13 percent and an operating margin of 14.28 percent.
The company’s revenue grew by 52 percent yearly, from Rs 78 crore in Q1FY23 to Rs 119 crore in Q1FY24, For the same timeframe, Net profit increased by 600 percent from Rs 1.21 crore to Rs 8.47 crore.
Rajnandini Metal Ltd is engaged in the business of manufacturing, and trading in Steel, Iron, Iron Alloy, Castings, various kinds of chemicals, furnace oils, and petroleum products
Rajnandini Metal Ltd is a penny stock, having a market capitalization of Rs 284 crore. On Friday, the company’s stock was trading at Rs 10.30 per share, up 2.50 percent from the previous closing.
The return on equity of the company fell slightly from 33.86 percent in FY22 to 33.01 percent in FY23, whereas the return on capital employed increased from 42 percent to 54 percent during the same time. whereas the company’s net profit margin increased to 1.32 percent and its operating margin increased to 2.76 percent.
The company’s revenue increased slightly yearly, from Rs 260 crore in Q1FY23 to Rs 265 crore in Q1FY24, For the same timeframe, Net profit increased by 28 percent from Rs 3.59 crore to Rs 4.59 crore.
Mishtann Foods Ltd. is engaged in manufacturing and processing of Rice, wheat, etc.
Mishtann Foods Ltd belongs to the penny stock category, with a market capitalization of Rs 697 crore. The company’s shares were trading at Rs 13.93 per share on Friday, up 0.30 percent from the previous close.
The Company’s return on equity increased from 31.05 percent in FY22 to 33.23 percent in FY23, while the return on capital employed rose from 42.96 percent to 47.97 percent during the same period. while the company’s net profit margin improved to 7.67 percent and an operating margin of 12.57 percent.
The company’s revenue declined by 49 percent yearly, from Rs 158 crore in Q1FY23 to Rs 80 crore in Q1FY24, For the same timeframe, Net profit declined by 64 percent from Rs 11 crore to Rs 4 crore.
Written by Omkar Chitnis
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