Return on equity (ROE) signifies a company’s capacity to generate returns on investments made by its shareholders. Return on Equity is the metric of a company’s net income divided by the value of its total shareholders’ equity.
Here are two penny stocks with ROEs of up to 32%.
Anmol India Ltd
Anmol India Limited is engaged in the business of wholesale trading of coal including the US, and Indonesia, and also in the business of petroleum coke, and coking coal.
Anmol India Ltd belongs to the penny stock category, having a market capitalization of Rs 242 crore. The company’s shares closed at Rs 42.63 per share on Friday, down 1.91 percent from the previous close price.
The profitability ratios of the company are in a strong position with the return on capital employed at 30.20 percent, the return on equity at 23.58 percent, and the company’s margin has increased to a net profit margin of 1.32 percent.
The company’s revenue has declined by 13 percent year on year, from Rs 556 crore in Q1FY23 to Rs 480 crore in Q1FY24. During the same period, net profit increased by 12.5 percent from Rs 8 crore to Rs 9 crore.
The company shares have delivered a return of 17 percent in six months and 25 percent in a year.
According to the recent shareholding pattern, the company promoters hold a 57.08 percent stake, while retail investors possess a 42.73 percent stake.
Axita Cotton Ltd
Axita Cotton Limited is an Indian company that manufactures, processes, finishes, and trades cotton bales, cotton yarns, and cotton seeds. On a contract basis, the firm also gins and presses seed cotton.
Axita Cotton Ltd belongs to the penny stock category, with a market capitalization of Rs 523 crore. The company’s shares closed at Rs 26.75 per share on Friday,up 0.40 percent from the previous trading session.
The profitability ratios of the company are in a strong position with the return on capital employed at 39.68 percent, the return on equity at 32.52 percent, and the company’s margin has increased to a net profit margin of 3.08 percent.
The company’s revenue has risen by 11 percent year on year, from Rs 556 crore in Q1FY23 to Rs 480 crore in Q1FY24. During the same period, net profit increased by 25 percent from Rs 4 crore to Rs 5 crore.
According to the latest shareholding pattern, the company promoters hold 69.97 percent stake, while retail investors possess 26.6 percent.
Written by Omkar Chitnis
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