Top Stocks Under Rs 20: The headline reads, “Dolly Khanna’s portfolio penny-stock turns multi-bagger”. Or it may be, “XYZ stock with price less than Rs. 20 per share becomes Rs. 200.” We realise after reading the news that it is no longer a penny stock it was.
You may be a novice investor hoping to buy low-quotation stocks or a value-hunter among small-caps. One thing is clear, such stocks can be a rags-to-riches story.
Though the investor appetite for such fundamentally strong stocks is huge, the availability is in short supply. A quick run on Screener fetches some 1,200 companies trading in the market with a share price of less than Rs. 20 per share.
How do you go about picking profitable companies among this large pool? What filters to use: revenue growth, profitability, debt to equity ratio or what else?
In this article, we bring to you such strong penny stocks and also top stocks under Rs 20. So without further ado, let us jump in.
Top Stocks under Rs 20
Stocks under Rs 20 #1 – Syncom Formulations
|Market Cap (Rs. Cr.)||875||CMP (Rs.)||9.3|
|Stock PE||44.2||Debt to Equity||0.26|
|Promoter Holding (%)||50.6||Price to Book Value (Rs.)||4|
|Face Value (Rs.)||1||Current Ratio||1.79|
Founded in 1995, Syncom Formulations is a pharmaceutical company based in Mumbai, Maharashtra. It has a state-of-the-art manufacturing plant in Pithampur, Madhya Pradesh. The small-cap pharma company exports its formulations to more than 15 countries and employs approximately 300 people.
Syncom produces and sells formulations in various dosage forms: tablets, capsules, liquid orals, vials & ampoule injections & dry vial injections, dry syrups, ointments, inhalers, and herbals.
Promoters seem to be bullish on the company as they have increased their stake from 38.98% in September 2019 to more than 50.5% as of June 2022. Its sales have grown consistently since 2018. However, it registered a de-growth of 10.20% in March 2022 in sales at Rs. 220 crores.
It has a low debt-to-equity ratio of 0.26 and the stock comes at a P/E ratio of 44.
Stocks under Rs 20 #2 – Aakash Exploration Services
|Market Cap (Rs. Cr.)||130||CMP (Rs.)||12.8|
|Stock PE||22.5||Debt to Equity||0.2|
|Promoter Holding (%)||66.8||Price to Book Value (Rs.)||2.72|
|Face Value (Rs.)||1||Current Ratio||1.25|
Aakash Exploration Services has been in the business of providing various oil and gas field services for the last 25 years. The company is headquartered in Ahmedabad, Gujarat and employs more than 900 people.
The company has two ISO certifications and one OHSAS certification in its name giving it a brand image and corporate identity. Its list of renowned clients includes ONGC, GSPCL, Cairn, Essar, and more.
The promoter holding, though high at 66.77% has been reduced by 6.56% from 73.77% in June 2021. Excluding the financial year 2021, the revenues of AES have grown from Rs. 67 crores in FY20 to Rs. 77 crores in FY22.
Another good thing about the company is that it has reduced its debt over the years and consequently its interest coverage ratio has gone up.
Stocks under Rs 20 #3 – Steel Exchange India
|Market Cap (Rs. Cr.)||1275||CMP (Rs.)||14.4|
|Stock PE||10.9||Debt to Equity||1.05|
|Promoter Holding (%)||49.8||Price to Book Value (Rs.)||2.92|
|Face Value (Rs.)||1||Current Ratio||1.43|
Steel Exchange India Ltd. or SEIL is an integrated steel maker that produces sponge iron (220.000 TPA), billet & ingots (340,000 TPA), TMT rebars (225,000 TPA) and captive power (71.64 MW). It is a company of the Vizag Profiles Group. The group is primarily in the real-estate sector developing residential properties.
The steel arm was set up in 1999 as part of the diversification efforts of the business group which used to trade steel and allied products previously. As of today, it operates two steel plants and has a strong brand value for its ‘Simhadri TMT’ bars.
Over the last three years, the small-cap steel manufacturer has scaled its revenues from Rs. 781 crores in 2020 to Rs. 1,099 crores in the year 2022.
Stocks under Rs 20 #4 – One Point One Solutions
|Market Cap (Rs. Cr.)||207||CMP (Rs.)||11|
|Stock PE||29.6||Debt to Equity||0.32|
|Promoter Holding (%)||70.1||Price to Book Value (Rs.)||4.44|
|Face Value (Rs.)||2||Current Ratio||1.31|
One Point One Solutions is a BPM/BPO services provider with 5,500 employees present across its 8 delivery centres. It provides a variety of services to its clients including customer care, lead generation, facial verification, e-mail management, online chat services, content management, accounts payable & receivable, SMS management and more.
It has a high promoter shareholding of 70.13% which has remained stable over the last five quarters. As of its revenue growth, it reported a total income of Rs. 132 crores for the year ended March 2022, an increase of almost 30%. With this, the company’s bottom line turned green as it reported a profit of Rs. 3 crores.
In January this year, the service provider split its shares from Rs. 10 face value to Rs. 2. The shares started trading on an ex-split basis from January 18, 2022.
Stocks under Rs 20 #5 – JCT
|Market Cap (Rs. Cr.)||317||CMP (Rs.)||3.65|
|Stock PE||32.9||Debt to Equity||0.49|
|Promoter Holding (%)||27.2||Price to Book Value (Rs.)||0.9|
|Face Value (Rs.)||2.5||Current Ratio||0.75|
A part of the Thapar Group, JCT Limited traces a long history. It commenced its operations in 1946.
Fast forward to today, JCT has an integrated textile facility in Punjab with a production capacity of 63 million meters per annum. It has two business segments: cotton, synthetic & blended textiles and nylon filament yarn.
The recent National Technical Textiles Mission to boost manufacturing and export of specific textile products made of man-made fibre is supposed to aid the company’s income.
The company has shown an increasing trend in revenues. But its profitability has declined on a year-on-year basis. This is primarily because of the high material cost it incurred in FY22. The manufacturer has a low promoter holding of 27.25% and almost all of that is pledged.
But despite that, on an impressive note, the management has worked towards decreasing the leverage by paying back debt.
List of 9 Top Stocks Under Rs 20
We went through five fundamentally good stocks in detail above. The list below presents a few more such companies.
|Company Name||Industry||CMP (Rs.)||Market Cap (Rs. Cr.)||3 Yr-Stock CAGR|
|Syncom Formulations (India)||Pharma||9.3||875||120%|
|Jaiprakash Power Ventures||Energy||8.1||5,544||70%|
|La Tim Metal & Industries||Trading||14.3||127||60%|
|Aakash Exploration Services||Oil & Gas||12.8||130||122%|
|Steel Exchange India||Steel||14.4||1,275||128%|
|Manaksia Coated Metals & Industries||Metals||19.6||125||60%|
|One Point One Soultions||BPO||11.6||217||62%|
In this article, we covered some of the top stocks under Rs 20. Such small-cap companies hold the potential to offer multi-bagger returns. However, they can also result in heavy losses for the shareholders as their stock prices are very volatile. Thus, investors should approach such companies with caution.
As a retail investor, what investment approach do you follow? Do you prefer small-cap companies, mid-cap or large-cap or keep a balance between them? How about you let us know in the comments below?
Vikalp Mishra is a commerce graduate from the University of Delhi. He likes to write on finance, money and business. He is a voracious reader with a genuine interest in investing. Drop him a mail at firstname.lastname@example.org.
Start Your Financial Learning Journey
Want to learn Stock Market and other Financial Products? Make sure to check out, FinGrad, the learning initiative by Trade Brains. Click here to start your financial learning journey with us. And do not miss out on the Introductory Offer!!