Best Penny Stocks to Buy Now in India 2024 | Samco (2024)

In this article, we will cover

• What are penny stocks?
• Things to keep in mind before investing in penny stocks
• Best Penny Stocks in India
• A Detailed Table with various parameters

What are Penny Stocks?

Penny stocks are stocks that trade at very low prices normally below 50 rupees. They have low market capitalization and mostly are illiquid. Penny stocks are lesser-known to the larger investing public. I Investors remain away from them because the information regarding their fundamentals and businesses is either not reliable or not available. However, penny stocks are known for generating multi-bagger returns within a few trading sessions.Since penny stocks are illiquid, sometimes only a few orders can lead to hitting circuit limit on the exchange. These stocks mostly give higher returns when they are hitting upper circuits for a number of days. Generally, this period of hitting circuits is not accompanied with trading volumes. Sometimes there is a strong fundamental story that moves the stock up. Other times it might just be a case of manipulation by stock operators. They artificially inflate the price and volumes to attract innocent retail investors. Once they have enough traders participating in the stocks they would offload their own holdings. Now that we have understood the modus operandi of penny stocks. lets see why are penny stocks called “Penny”Stocks

Penny Stocks are Called Penny Stocks for a Reason!

Penny stocks trade at such low rates for a reason because most of the traders buying penny stocks don’t even care about them and look to exit sooner or later once they have given decent returns. Penny stocks in India often don’t comply with exchange regulations. They are not even transparent in their reporting. It is only when there is some news or some turnaround stories on penny stocks, that they move. The speculation leads to an increase in trading volumes and prices soar. But very few of them turn out to be true or genuinely strong on a fundamental basis. Any negative news causes the price to turn south.

List of Best Penny Stocks to Buy now in India

*As on 9th August 2024

People who generally trade or invest in penny stocks are generally the lower class of retail investors who do not keep a portfolio approach and invest in them based on news or tip from some random sources. They think the price is so low that they will not lose much but if the stock turns out to be good then it could double or triple their investment. However, investors should always keep in mind that they might be investing in small amounts but still, they can lose 100 percent of their capital.

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Things to keep in mind while buying penny stocks

The risk that a penny stock will go bust is equally high. The company can suddenly shut down or there can be very little probability of giving multi-bagger returns. The total capital that deserves to be invested in penny stocks should not be more than 2 to 3 percent of a person’s portfolio value. Investing in penny stocks is mostly speculative. First of all, investors should avoid investing in them and if they buy any it should be treated as buying a lottery. You should never become emotionally attached to them in the hope of some good news. Investors should also never follow a buy and hold approach even if they have got good returns recently. Because over a period of time neither they are able to generate value for shareholders nor they follow a transparent reporting system. Investors should also research extensively about the stock and the news going on in the public domain and not become the victim of operators’ conspiracy, who later offload their holdings after manipulating the price.

The transaction cost for some penny stocks is also higher and on some the brokerage is charged on a per-share basis. Similarly when stocks trade at a very low price, the spread between the bid and ask price also turn out to be significant in terms of percentage. The stocks mentioned in the watchlist have been determined after keeping in mind news, speculation, trend in their price chart, and a few fundamental factors such as debt to equity ratio and cashflows. But this information will vary on a day to day basis depending on the newsflow and an investor should make some relevant background checks in his capacity before investing in these stocks.

Best penny stocks in India

Easy Trip Planners

EaseMyTrip commenced its operations in 2008 by focusing on the B2B2C (business to business to customer) distribution channel and providing travel agents access to its website to book domestic travel airline tickets in order to cater to the offline travel market in India. The company has a healthy RoE and RoCE of 47% and 54.6%. It has 5 year Sales and Profit CAGR of 34% and 86%, respectively. It is currently trading below its 5-year average PE.

Vodafone Idea Ltd

Vodafone Idea Limited is an Aditya Birla Group and Vodafone Group partnership. It is India’s leading telecom service provider. It is the third largest wireless operator by subscribers in India with a Revenue Market Share of approximately 21.75% of the Indian mobile telecommunications services industry. The Company provides pan India Voice and Data services across 2G, 3G and 4G platforms. The business has announced that it will soon be rolling out its 5G services in India. Competition from peers such as Reliance Jio and Airtel is a major blow to Vodafone’s business as it is losing subscribers slowly to them. Vodafone can be on a speculator’s radar; however, it is extremely risky, and volumes should be closely observed before buying this stock.

You can watch our Spotlight video on Vodafone Idea by CA Paras Matalia, Head of Stockbasket.com to know his views on the stock.

NHPC Limited

NHPC Ltd is a Mini-Ratna Category-I Enterprise of the Government of India. The company is one of the largest organizations in the field of hydropower development in the country. It is a hydroelectric power generating company dedicated to the planning, development and implementation of an integrated and efficient network of hydroelectric projects in India. They execute all aspects of the development of hydroelectric projects, from concept to commissioning of the projects. The company has a good dividend yield of around 4.6% and low debt to equity ratio of 0.80. The stock has delivered over 100% returns within last one year.

Morepen Laboratories

Morepen Laboratories is a Pharmaceutical company. Morepen has steadily grown from a single product company to a multi-activity company with a global vision and satisfied customers in over 80 countries. The company has three state-of-the-art manufacturing plants in the northern state of Himachal Pradesh (HP) in India. The main plant at Parwanoo is inspected and approved by the United States Food and Drug Administration (USFDA) for production of Loratadine, which is the best selling anti-allergy drug globally. It is the largest producer of Loratadine in the World and presently has over 90% market share of generic Loratadine in the US market, a supplier to top-class customers like Novartis, Merck, etc. The company has a good debt to equity ratio of 0.03. Over the past 5 years, sales and profits have delivered a CAGR of 18.5% and 5.4%, respectively.

TV18 Broadcast Limited

TV18 Broadcast Ltd has been backed by the largest company in India as per the market capital, Reliance. Post Covid, the growth in the media and entertainment sector has been evident. TV18 has been aggressively taking initiatives to improve its market share. In an oligopoly market, the company has high chances of doing the same. Further, recently BodhiTree has invested in the firm in order to lead growth. The stock has been in an uptrend with a range bound perspective with a range of Rs 30 – 70. Hence, with decent fundamentals and looking at the technical, the stock seems a fair contender for penny stock trading.

GMR Airports Infrastructure

GMR Airports Infrastructure Limited (formerly known as GMR Infrastructure Limited) a subsidiary of GEPL is engaged in the development, operation, and maintenance of airports along with offering integrated security solutions. The company operates through GMR Airports Limited (GAL) managing the Airports segments and RAXA Techno Security Solutions managing the security solutions. A healthy traffic growth was witnessed in Q3FY24. The company is optimistic about the growth potential with expansion projects and increased traffic. The stock has delivered over 90% returns within the past 1 year.

Trident

Trident Limited is the flagship Company of Trident Group, an Indian business conglomerate and a global player. Trident Limited is a vertically integrated textile (Yarn, Towel & Bedsheets) and Paper (Wheat Straw-based) manufacturer. The company’s towel, yarn, bed sheets and paper businesses have earned global recognition and are delighting millions of consumers across India and the world. It is one of the largest players in home textile in India. Supplying national, captive, and retailer owned brands, the organization is highly decorated with awards from its customers, vendors, and various government entities in recognition of advancing the highest standards in product quality, social responsibility, and environmental stewardship. The company operates in four major business segments: Yarn, Towel, Bedsheets and Paper & Chemicals with its manufacturing facilities located in Punjab and Madhya Pradesh. Trident intends to grow to Rs 25,000 Crores by 2025 with 12% bottom line as a business group. The company has a good 5 year average ROE with 13.64% and a debt to equity ratio of 0.33. The company is trading near its 3 years average price-to-book ratio.

Bank of Maharashtra

Bank of Maharashtra (BoM) was registered on September 16, 1935 with a capital of Rs10 Lakh. The bank has the largest network of branches than any other public sector banks in Maharashtra. The services offered by the bank include Personal Banking - under which they offer services; products such as deposits, savings, personal loans, educational loans, RTGS, demat services, credit cards, etc.; NRI banking under which they offer products and services to NRI clients such as FCNR accounts, remittance services, etc. The PSU bank also offers services to agricultural and SME sectors. The company reported exceptional results with a 45% jump in its profit in Q4FY24 The stock has delivered over 100% returns in the past 1 year.

Best Penny Stocks: Here’s a quick video

List of Penny Stocks in India: Model Watchlist

If one wants to bring down the list to 4 to 5 stocks for closely tracking, then the below table is suitable for a beginner.

*Data as on August 9, 2024

A detailed table with various parameters

You can check the live prices and trade in these or any other penny stocks at lowest brokerage with SAMCO, India’s leading discount brokerage. Open a Free Demat and Trading Account today!

*Data as on August 9, 2024

Loving the valuable content? Invite friends to Samco to explore our informative blogs. Earn voucher rewards for each successful referral. Start referring now and reap the rewards.

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