5 Penny Stocks that Started 2024 with a Bang with Gains up to 80%

The week gone by was dominated by news of penny stocks and smallcaps rallying hard in the new year.

Only a week into 2024 and we've already seen stocks, across the board, rally.

The positive momentum of 2023 surely has dragged into the first week of 2024.

Let's look at the top penny stocks that have started 2024 with a bang.

Remember... if the momentum is strong and if there's strong investor participation, you could expect these stocks to do well at least for the next couple of weeks.

#1 Advik Capital

First on this list is Advik Capital.

The company is a non-deposit taking NBFC, engaged in the business of investing funds, advancing loans to industries, and financing lease operations, among other things.

It's actively looking at other business avenues in personal and consumer finance space.

Only a week into the new year 2024, shares of the company have shot up around 80%.

From Rs 2 to Rs 3.78 at present, shares have shot up 80% in less than a week.

The reason?

Even the company is not aware of what's happening with its price movement.

When asked by exchanges about the price movement, the company said that there's no undisclosed price sensitive information or any impending announcement / corporate action which needs to be informed.

The sudden rise could be attributed to the company launching its AIF last month. Advik Capital had announced plans to launch an alternative investment fund (AIF) in December 2023.

The company was expected to file for the licence with the market regulator.

Here, it's planning to raise Rs 2.5 bn in its AIF and as sponsor of the proposed AIF, has earmarked to invest 10% of the corpus of the fund.

This is part of its strategic plan to diversify into futuristic new edge businesses.

Advik Capital has seen a strong rebound in its financials in the past two years. It's expected to give a similar performance this year as well, going by its half year performance for FY24.

Financial Snapshot

Rs m, consolidated	FY19	FY20	FY21	FY22	FY23
Net Sales	45	75	63	465	6,043
Growth (%)	47%	65%	-16%	642%	1201%
Operating Profit	5	6	5	11	160
OPM (%)	11%	8%	8%	2%	3%
Net Profit	1	1	1	5	93
Net Margin (%)	3%	1%	1%	1%	2%
ROE (%)	1.0	0.9	0.7	5.0	27.4
ROCE (%)	1.9	2.5	2.4	6.4	21.4
Dividend (Rs)	0.0	0.0	0.0	0.0	0.0
Debt to Equity (x)	0.1	0.2	0.3	0.5	1.3

Data Source: Ace Equity

#2 Integra Essentia

Next on this list is Integra Essentia.

The company is engaged in the business of life essentials, food (agro products), clothing (textiles and garments), infrastructure, and energy.

In just one week, shares of the company have shot up by 69%, rising from Rs 4.38 to Rs 11.78 at present.

The primary reason for this current upmove could be attributed to the company fixing its record date for bonus shares announcement.

The company recently fixed 11 January 2024 as the record date for the purpose of issue of bonus shares in a 1:1 ratio.

As the record date is nearing, retail investors are buying the stock head over heels.

There are other reasons as well that explain the upmove seen in the stock in the past couple of months.

In November 2023, the company's board okayed allotment of securities to raise funds for an aggregate amount of up to Rs 1 bn.

Meanwhile, the company also recently forayed into the high growth winery and beverages business segment.

It acquired additional stake in Brewtus Beverages in the second quarter of FY24.

Speaking about the second quarter, the company posted a massive jump in its profit, aided by higher income.

It posted a net profit of Rs 75.4 million (m) as compared to a net profit of Rs 21.5 m in the year-ago period.

In the second quarter, it got orders amounting to Rs 120 m for supplying premium rice & cashew nuts from several business houses.

The company has seen a massive improvement in financials in the past two years and going by the first two quarters of this year, it could surpass previous years numbers by a huge margin.

Financial Snapshot

Rs m, consolidated	FY19	FY20	FY21	FY22	FY23
Net Sales	-	-	-	685	2,414
Growth (%)	-	-	-	-	252%
Operating Profit	-5	-2	-2	11	72
OPM (%)	-	-	-	2%	3%
Net Profit	-23	-134	-6	11	66
Net Margin (%)	-	-	-	2%	3%
ROE (%)	0.0	0.0	0.0	0.0	28.6
ROCE (%)	-10.4	-151.9	0.0	0.0	13.9
Dividend (Rs)	0.0	0.0	0.0	0.0	0.0
Debt to Equity (x)	-2.1	-1.0	-1.0	-1.0	0.4

Data Source: Ace Equity

#3 Alok Industries

Third on the list of best performing penny stocks of 2024 is Alok Industries.

The company is engaged in the textile business with a presence in the cotton and polyester segments.

The operations of the company are managed and supervised by India's most valuable listed company Reliance Industries through its three nominee directors.

In the first week of 2024, shares of the company have spiked by over 65%.

The primary reason behind this recent upmove could be attributed to a Rs 33 bn fund infusion via Reliance.

It was reported last week that Reliance Industries has invested about Rs 33 bn in the company through non-convertible preference shares.

In November 2023, Alok Industries entered into an agreement with SBI for a term loan of Rs 17.5 bn for repayment of existing loans from banks as a part of financial restructuring.

Still a loss-making company, it's hoping for a turnaround in the remaining two quarters of FY24.

Financial Snapshot

Rs m, consolidated	FY19	FY20	FY21	FY22	FY23
Net Sales	33,522	33,288	38,476	73,095	69,373
Growth (%)	-39%	-1%	16%	90%	-5%
Operating Profit	-1,104	-1,075	2,233	6,099	-128
OPM (%)	-3%	-3%	6%	8%	0%
Net Profit	20,762	13,102	-56,733	-2,086	-8,805
Net Margin (%)	62%	39%	-147%	-3%	-13%
ROE (%)	0.0	0.0	0.0	0.0	0.0
ROCE (%)	59.5	10.1	-33.6	4.1	-6.5
Dividend (Rs)	0.0	0.0	0.0	0.0	0.0
Debt to Equity (x)	-1.7	-2.4	-1.4	-1.4	-1.3

Data Source: Ace Equity

#4 Zeal Aqua

Next on this list is Zeal Aqua.

The company does aquaculture farming and development of satellite farming, especially prawn farming and trading of seed, feed, and medicines required for shrimp farming, across Gujarat.

In the first week of 2024, shares of the company gained almost 50%.

When asked about the price movement, the company said that they don't have any price sensitive information to be intimated.

The company has seen a steady improvement in its financials in the past five years. FY24 could be its best ever year in terms of sales and profit, going by its results for the first two quarters.

Financial Snapshot

Rs m, standalone	FY19	FY20	FY21	FY22	FY23
Net Sales	2,320	2,385	2,975	3,452	3,627
Growth (%)	31%	3%	25%	16%	5%
Operating Profit	278	249	245	231	273
OPM (%)	12%	10%	8%	7%	8%
Net Profit	75	63	43	57	71
Net Margin (%)	3%	3%	1%	2%	2%
ROE (%)	16.7	12.2	7.6	9.5	10.5
ROCE (%)	14.7	12.5	11.1	9.6	11.1
Dividend (Rs)	0.0	0.0	0.0	0.0	0.0
Debt to Equity (x)	1.8	1.7	2.1	2.0	1.9

Data Source: Ace Equity

Zeal Aqua's promoters have more than 25 years of experience in shrimp farming, which is an added plus as the company has over the years successfully diversified operations in several aspects of shrimp segment.

#5 Reliance Power

Last on this list is none other than Reliance Power.

The company develops, constructs and operates power projects both in India as well as internationally.

Through its subsidiaries and own operations, it has a large portfolio of power generation capacity, both in operation as well as capacity under development.

In the first week of 2024, shares of Reliance Power surged around 40%.

Shares of the company, along with other power stocks, have been in demand on optimism about tariff hike in the power sector.

Last week, Reliance Power inked an agreement to sell its 1,200 MW Kalai II hydroelectric project in Arunachal Pradesh for Rs 1.3 bn, thereby monetising its asset.

Reliance Power shares have been in demand for the past three months owing to improvement in its financials and capital infusion by promoters.

In line with the government's push for renewable energy, Reliance Power has made significant strides in this direction.

A recent highlight is their memorandum of understanding (MOU) with the government of Rajasthan to develop 6,000 megawatt (MW) of solar power projects in the state over the next decade.

One positive for the power sector is that companies typically have a secure position due to high entry barriers, creating a space where established players can thrive.

However, there are strong competitors in the sector which Reliance Power has to compete with.

And the company does not have a long history of reporting consistent profit and regular sales.

So, we'll have to wait and see how Reliance Power is able to make the most of this electricity demand and leverage on the growing needs of the power sector.

Financial Snapshot

Rs m, consolidated	FY19	FY20	FY21	FY22	FY23
Net Sales	82,013	75,623	79,340	75,031	75,427
Growth (%)	-15%	-8%	5%	-5%	1%
Operating Profit	42,667	36,622	40,296	29,186	22,250
OPM (%)	52%	48%	51%	39%	29%
Net Profit	-29,518	-42,715	1,812	-9,640	-4,708
Net Margin (%)	-36%	-56%	2%	-13%	-6%
ROE (%)	-15.3	-29.2	3.5	-7.7	-3.1
ROCE (%)	0.5	-2.7	7.5	5.1	6.6
Dividend (Rs)	0.0	0.0	0.0	0.0	0.0
Debt to Equity (x)	1.8	2.4	2.1	2.0	1.8

Data Source: Ace Equity

Which Other Penny Stocks Gained the Most?

Apart from the above, here are several other penny stocks that have started 2024 with a bang.

Best Penny Stocks 2024

Company Name	Current Price (Rs)	Gains (%)
Ducon Infratechnologies Ltd.	12.31	34%
Unitech Ltd.	9.12	34%
Reliance Home Finance Ltd.	5.93	33%
Magnum Ventures Ltd.	62.5	32%
Rajshree Sugars & Chemicals Ltd.	73.48	31%
Bharat Road Network Ltd.	64.55	30%
Zee Learn Ltd.	8.44	30%
GTL Infrastructure Ltd.	1.68	29%
Sakuma Exports Ltd.	22.58	27%
Aarey Drugs & Pharmaceuticals Ltd.	63.53	26%
Steel Exchange India Ltd.	13.14	25%
Mcnally Bharat Engineering Company Ltd.	7.09	25%
Digispice Technologies Ltd.	34.27	22%
Incredible Industries Ltd.	39.41	20%
Super Tannery Ltd.	10.5	19%

Data Source: Ace Equity

In Conclusion

The recent rally in these penny stocks in 2024 has attracted attention from investors.

While short-term gains may be attractive, it is crucial to carefully assess the potential risks and long-term viability of these investments before deciding.

Investing always involves a certain degree of risk, and it's crucial to weigh the pros and cons before taking the plunge.

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...