Although 2022 was volatile for India’s stock markets due to interest rate hikes and geopolitical tensions, some investors made a fortune by investing in little-known penny stocks.
Both the BSE Sensex and the Nifty 50 gained over 7 percent each in 2022. Here are seven penny stocks that have given returns of over 1,000 percent since the start of the year. Typically, penny stocks are priced below Rs 10 and considered the riskiest across categories.
This list consists of seven companies that had posted losses for many quarters and in some cases, even reported zero revenue. Analysts said these stocks had one unique feature that attracted investors: their low price. Investors easily fall for such stocks while trying to make quick money but they usually end up wiping out everything. Analysts advise investors to avoid such stocks.
“Instead of looking at the price of the stock and investing, investors should focus on fundamentals of the underlying business model and growth potential of product and services in the business to generate wealth for the long term," said Prashant Tapse, a research analyst at Mehta Equities.
None of these penny stock companies are covered by analysts. Here are the details of the earnings of these companies:
Kaiser Corporation: The biggest multibagger of 2022, this stock surged over 1,959 percent. The stock traded at Rs 2.80 at the start of 2022 and currently is at about Rs 57.
The company reported a loss on an operating and net basis for the second consecutive quarter. Revenue declined over 50 percent quarter on quarter and weakened more than 75 percent year on year. Its debt increased to Rs 10.43 crore in September from Rs 5.76 crore in March. The company prints labels, packaging material, magazines and cartons.
Alliance Integrated Metaliks: The company makes metal products for bridges and towers. At the start of the year, the stock traded at Rs 2.71 and it currently is at about Rs 45, gaining 1,578 percent.
The company has reported losses for 22 consecutive quarters. Revenue declined for the fourth consecutive quarter. However, the company posted an operating profit for the seventh straight quarter amid a decline in total costs. Its debt rose to Rs 335.82 crore in September from Rs 302.17 crore.
Hemang Resources: The company is a coal supplier and also offers infrastructure-related services. The stock surged 1,612 percent to Rs 53 from Rs 3.09 at the start of the year. The jump was attributed to a significant rise in its revenue over the past few quarters and reduced debt.
The company reported revenue of Rs 86.72 crore in the September quarter against zero revenue a year ago. In the June quarter, it reported revenue of Rs 68.81 crore. It reported a net profit for the fifth straight quarter. The company cut its debt to Rs 3.39 crore in September from Rs 21.59 crore in March 2021.
KBS India: The company offers wealth management services including investment planning in the stock market and securities brokerage services. Its shares surged over 1,378 percent to Rs 141 from Rs 9.50 at the start of the year. In 2021, the stock gained almost 140 percent. The firm reported a net profit of Rs 39 lakh for FY22 compared with Rs 1 lakh a year earlier. Revenue for the period stood at Rs 1.86 crore versus nil a year earlier.
Sonal Adhesives: The stock advanced 1,359 percent to Rs 136 from Rs 9.30. The company makes plastic rope, self-adhesive tapes and acrylic adhesives. It reported revenue of Rs 21.08 crore in Q2 versus Rs 13.07 crore a year earlier. Net profit jumped to Rs 28 lakh from a loss of Rs 1.14 lakh. It reduced debt to Rs 3.34 crore as of September 2022 from Rs 27.06 crore a year ago.
Beekay Niryat: This scrip advanced 1,000 percent to Rs 80 from Rs 7 at the start of the year. The company invests in shares, trades in jute and jute products, and syndicates loans. It reported revenue of Rs 2.85 crore in the September quarter from Rs 19 lakh a quarter ago. Earlier, it had reported zero revenue for many quarters. As of September, its total debt was about Rs 6 crore compared with Rs 67 lakh a year earlier.
Ashnisha Industries: The stock advanced over 1,000 percent to Rs 10 from Rs 0.96. The company started reporting revenue in the past two quarters. It reported revenue of Rs 1.15 crore in the September quarter versus Rs 53 lakh a quarter ago. Net profit was Rs 7 lakh against Rs 25 lakh a quarter ago. The company is a steel producer and provides trading and investment services.
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