Investors are looking for penny stock that has the potential to deliver multibagger returns. Penny stocks are highly volatile, but once they start moving in the direction of investors, it is no less than a lottery.
A big criterion for choosing penny stocks is that if you see a penny stock whose PE ratio is less than the PE ratio of that stock’s industry, then immediately include it in your watch list. Later, a decision can be taken after considering more parameters.
Retail investors are attracted to penny stocks because they offer the possibility of huge gains. These stocks are very cheap and their market capitalization is low.
These stocks often do not have much liquidity, which means that they are traded in less volume than other stocks.
Below is a list of 3 penny stocks whose PE ratio is less than the PE ratio of their industry:
Seacoast Shipping Services Ltd
Seacoast Shipping Services Ltd’s market capitalization is 332 crore rupees. The share of this logistics service company started Tuesday’s trading session at Rs 6.44, while in the previous trading session, it closed at Rs 6.32. Currently, it is trading at Rs 6.17 per share.
Talking about the financial details of the company, the company’s revenue increased from Rs 27.99 crore in the December quarter to Rs 125.02 crore in the March quarter, an increase of 347 %.
During the period of FY 23-24, the company achieved a Return on Equity (ROE), of 15.94 % and a Return on Capital Employed (ROCE), of 24.57 %. Apart from this, the net profit margin was 5.42 percent during FY 23-24.
The stock has a PE ratio of 14.9x while the industry average is 23x and the PEG ratio is 0.04 times, which means that the market has undervalued its value with its estimated earning potential.
Seacoast Shipping Services Ltd is a logistics firm that offers one-stop solutions to transport dry bulk cargo by sea.
Integra Essentia Ltd
Integra Essentia Ltd has a market cap of Rs 448 crore. The share price of this company opened Tuesday’s session at 4.15 rupees.
Its previous closing price was 4.17 rupees. The stock reached a high of nearly 2 % during the trading session and is now at Rs 4.23 per share.
When we examine the financial performance, the revenue has decreased by around 8 percent. It went from Rs 93.31 in the March quarter down to 86.06 rupees in the June quarter. The net profit fell by 59 % to 2,45 crore rupees from 5,93 crore rupees during the same period.
For the period FY23-24, the company reported that it had a Return on Equity (ROE), of 13.17 %, and a Return on Capital Employed (ROCE), of 15.66 %. Apart from this, the net profit margin stood at 5.56 percent during the same period.
The PE ratio of this stock is 26.9 x, while the industry average PE ratio is 38.4 x.
DRC Systems India Ltd
DRC Systems India Ltd has a market capitalization of 386 crore rupees. This IT company’s share price started the Tuesday trading session at 29.25 rupees, an increase of about 1 percent over its previous closing of 28.96 rupees, and currently trades at 28.89 rupees per share.
For the period FY 23 to 24, the company reported a return on equity (ROE), of 24.36 % and a Return on Capital Employed (ROCE), of 24.90 percent.
During the same period, the net profit margin was also 24.34 %. The PE ratio of the company is 26.9x while that of the industry is 39.2x.
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