Fundamentally strong companies that have robust financials, 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 the market.
Listed below are two fundamentally strong Penny Stocks
International Conveyors Ltd
International Conveyors manufacture and market solid woven fabric reinforced PVC impregnated and PVC covered fire retardant.
International Conveyors Ltd belongs to the penny stock category, with a market capitalization of Rs 474 crore. The company’s shares were trading at Rs 74.80 per share on Tuesday, up 0.13 percent from the previous close.
The company’s margins are improving, with a net profit margin of 13.35 percent and an operating margin of 19.10 percent, while return on equity stands at 13.35 percent and return on capital employed at 19.07 percent.
Company’s revenue grew by 5 percent yearly, from Rs 205 crore in FY 21-22 to Rs 215 crore in FY 22-23, For the same timeframe, Net profit increased by 75 percent from Rs 16 crore to Rs 28 crore.
According to the latest shareholding pattern, the company’s promoters own 70.65 percent of the stake, while retail investors own 29.29 percent.
Jullundur Motor Agency Delhi Ltd.
Jullundur Motor Agency Delhi Ltd is one of the major vehicle Spare Parts Distribution firms, specialising in the trade and distribution of vehicle parts, accessories, and gasoline supplies.
Jullundur Motor Agency Delhi Ltd is a penny stock with a market capitalisation of Rs 164 crore.The company’s shares were trading at Rs 71.60 per share on Tuesday, down 0.42 percent from the previous close.
The financial metrics of the company have significantly improved, The return on equity stands at 13.21 percent and return on capital employed stands at 17.65 percent, while the company’s margins are improving, with a net profit margin of 5.44 percent and a debt-to-equity ratio of zero.
The company’s sales climbed to Rs 118 crore in Q1FY24, compared to Rs 116 crore in the same quarter last year, but net profit decreased to Rs 5 crore in the current quarter, compared to Rs 4 crore in the same quarter last year.
Written by Omkar Chitnis
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