Best Penny Stocks Under ₹5 in September 2024 – 5yr CAGR Basis

Penny stocks are low-priced shares of companies with low market capitalisation, and they are mostly illiquid. Penny stocks are known for their high volatility and can experience significant price swings in a short time. There is also not much reliable information about these stocks available publicly. Penny stocks are said to have the potential to give higher returns because, to start with, they are priced very low. So the stock prices can multiply several times when compared to stocks whose prices have risen substantially.

However, since penny stocks are highly volatile and speculation is quite common, one cannot say if the price rise is sustainable or just a byproduct of speculation. Because of their unpredictable nature, investing in penny stocks comes at a high risk. That said, it is wise to conduct thorough research before investing in penny stocks.

In this article, we’ll check some of the best penny stocks in India below ₹5 in September 2024, based on the 5-yr CAGR.

Best Penny Stocks Under ₹5 in September 2024 – 5yr CAGR Basis

Note: The penny stocks list below ₹5 provided here are as of September 20, 2024, and are filtered based on:

1. 5-year CAGR (sorted high to low)
2. Net income > 0
3. Debt to equity ratio (Low)

Overview of Top Penny Stocks Under ₹5 in September 2024

• Integra Essentia Ltd

Integra Essentia Ltd, established in 2007, focuses on essential life products. Its main areas include food (agricultural products), clothing (textiles and garments), infrastructure (materials and services for construction and development), and energy (materials, products, and services for renewable energy projects).

For the quarter ended June 2024, the company’s revenue decreased to ₹86.06 crore from ₹93.31 crore in the preceding quarter. Meanwhile, the net profit decreased to ₹2.36 crore from ₹5.92 crore in the previous quarter.

Key metrics: 

• Earning per share (EPS): ₹0.15
• Return on equity (ROE): 14.14%

• PMC Fincorp Ltd

PMC Fincorp Ltd was founded in 1985 to provide financial services. It offers corporate and personal finance, debt syndication, private placement, and marketing of financial products. The company also deals in and invests in the stock market. It became a public company in 1988.

For the quarter ended June 2024, the company’s revenue decreased to ₹8.05 crore from ₹5.80 crore in the preceding quarter. Meanwhile, the net profit increased to ₹5.86 crore from ₹3.85 crore in the previous quarter.

Key metrics: 

• EPS: ₹0.29
• ROE: 13.34%

• Symbiox Investment & Trading Co Ltd

Founded in 1979, Symbiox Investment & Trading Co Ltd focuses on loans, advances, and investments. The company is engaged in investing and trading in textiles, offering a wide range of sarees suitable for all age groups. It plans to expand into trading other products through wholesalers and retailers.

For the quarter ended June 2024, the company’s revenue decreased to ₹0.31 crore from ₹1.12 crore in the preceding quarter. Meanwhile, the net profit increased to ₹0.01 crore from -₹0.03 crore in the previous quarter.

Key metrics: 

• EPS: ₹0.06
• ROE: 0.61%

• Bridge Securities Limited

Bridge Securities Limited, established in 1994, is an Indian company involved in securities trading, stock broking, and leasing.

For the quarter ended June 2024, the company’s revenue decreased to ₹0.10 crore from ₹0.32 crore in the preceding quarter. Meanwhile, the net profit decreased to ₹0.03 crore from ₹0.27 crore in the previous quarter.

Key metrics: 

• EPS: ₹0.15
• ROE: 53.12%

• Biogen Pharmachem Industries Ltd

Biogen Pharmachem Industries Ltd is involved in trading shares and securities in both present and future markets. It also trades various commodities, including agro-based products and precious metals. Additionally, it provides stock broking and consulting services and generates trades, and sells wind power.

For the quarter ended June 2024, the company reported revenue of ₹-0.09 crore. Meanwhile, the net profit decreased to -₹0.16 crore from ₹0.74 crore in the previous quarter.

Key metrics: 

• EPS: ₹0.02
• ROE: 2.42%

Things to Keep in Mind When Investing in Penny Stocks

• High Risk: Penny stocks come with significant risks due to their high volatility.
• Liquidity Issues: Despite their low price, penny stocks are often illiquid, making buying or selling them challenging due to limited investor interest.
• Lack of Information: Penny stocks usually have limited financial data and analyst coverage. Hence, it is difficult to assess their true value and potential.
• Manipulation: Penny stocks are prone to schemes like “pump and dump,” where prices are artificially inflated by misleading information, only to drop sharply, leaving investors with losses.

Conclusion

While penny stocks are low priced, they are very volatile. When selecting penny stocks in India, make sure to thoroughly research the stock’s fundamentals and financials. Avoid buying based solely on unsolicited tips or recommendations, and consult with a financial advisor. Also, be cautious of potential future dilution of shares and ensure you’re prepared for the high risks associated with penny stocks.