6 Penny Stocks that Rallied 2,500%+ in One Year

There are growth stocks. There are dividend stocks. And there are penny stocks. Investors often find the last variety irresistible because of their potential for significant gains.

While investing in penny stocks can be risky, some investors are willing to take the chance for the possibility of substantial returns.

Penny stocks are known for NOT having a reliable track record and sufficient information dissemination. On top of that, liquidity concerns continue to stay on the back of an investor's mind.

However, there are certain penny stocks that not only have a decent track record but also have a rock solid balance sheet and visionary management.

If investors get all these traits in a company, what else can they ask for?

Such fundamentally strong penny stocks have the ability to surge multifold, delivering up to 1,000% gains.

In this article, we'll look at six such penny stocks that have surged over 1,000% (some even 2,500%+) or more in just one year (performance between April 2023 and March 2024).

Let's go!!!

#1 Archana Software (2,618%)

Trading at less than four rupees a year ago, shares of Archana Software have seen a meteoric rise.

In April last year, shares of the company were trading at Rs 3.6 per share... skip forward to today... and shares trade at Rs 98 per share with a market cap of Rs 594 million (m).

This translates into a gain of 2,618%.

In fact, if you consider the company's peak price of Rs 144 touched just a month ago, the gains go up to as much as 3,900%!

Archana Software is engaged in the business of trading of fabrics and developing software.

It basically offers these three services -

• IT Services: Enterprise Business Solutions, Extended Enterprise Solutions, Infrastructure Management Services, Testing
• IT Enabled services (ITES): Call Centers, Electronic Publishing, Portals, ERP
• Trading: Wholesale Textile Trading

The sharp rally in shares of this IT company comes at a time when there is talk of a slowdown in the US and Europe.

What's shocking is that despite the company posting repeated losses for several years, the market has rewarded shareholders because of management's continuous efforts towards improving the existing business.

For the nine-month ended December 2023, Archana Software has reported a loss of Rs 1 million.

Financial Snapshot

Rs m, standalone	FY19	FY20	FY21	FY22	FY23
Net Sales	8.7	12.9	1.5	0.0	0.0
Growth (%)	-97%	48%	-89%	-99%	-50%
Operating Profit	0.2	-0.2	-1.0	-1.4	-1.2
OPM (%)	2%	-2%	-67%	-	-
Net Profit	0.1	-0.2	-1.0	-1.4	-1.2
Net Margin (%)	2%	-2%	-69%	-	-
ROE (%)	0.5	-0.8	-4.0	-5.9	-5.3
ROCE (%)	0.6	-0.8	-3.9	-5.9	-5.3
Dividend (Rs)	0.0	0.0	0.0	0.0	0.0
Debt to Equity (x)	0.0	0.0	0.0	0.0	0.0

Data Source: Ace Equity

It remains to be seen whether shares of Archana Software continue the momentum in the new financial year.

#2 Avance Technologies (1,753%)

Next on this list is Avance Technologies.

Shares of the company have shot up from Rs 0.07 in April 2023 to Rs 1.26 at present, registering over 1,700% gains within a year.

In fact... most of the momentum caught up in 2024 after it was reported that the company is likely to raise funds.

In February 2024, the company approved increasing its authorized share capital and raising funds by issue of equity shares.

Prior to that in November 2023, the stock was in focus as it split its shares in the ratio 5:1.

Avance Technologies designs and develops software solutions. The company offers a platform to provide mobile marketing, subscriber management, call conferencing, and web integration solutions.

The company recently posted good growth in its Q3 earnings report and the IT company is looking to surpass FY23 numbers this year.

Financial Snapshot

Rs m, standalone	FY19	FY20	FY21	FY22	FY23
Net Sales	34.0	3.0	0.4	115.2	305.3
Growth (%)	-88%	-91%	-86%	26681%	165%
Operating Profit	7.6	0.2	-0.8	-6.2	5.0
OPM (%)	22%	7%	-	-5%	2%
Net Profit	5.6	-506.2	-275.7	-6.2	4.1
Net Margin (%)	16%	-	-	-5%	1%
ROE (%)	0.1	-14.8	-9.7	-0.2	0.1
ROCE (%)	0.1	-10.4	-7.7	-0.2	0.1
Dividend (Rs)	0.0	0.0	0.0	0.0	0.0
Debt to Equity (x)	0.4	0.5	0.0	0.0	0.0

Data Source: Ace Equity

Interestingly, promoter holding in this company stands at just 0.68% with majority of shares owned by retail investors.

To know more, check out its detailed shareholding pattern here.

#3 Frontier Capital (1,202%)

Third on this list is Frontier Capital.

Shares of Frontier Capital have rallied 1,202% in FY24, rising from Rs 2.5 per share to Rs 32.6 per share at present.

Frontier Capital is in the business of granting loans and advances.

It basically provides financing of heavy commercial vehicles & construction equipment, hire purchase, inventory finance, bill discounting, factoring and related insurance services.

The sharp rally in its shares comes even after it has showed zero to none improvement in its financials.

In the most recent December 2023 quarter, the company posted a decline in its revenue while profit came in flat.

It has reduced its debt over the years though, more so in the current financial year.

Financial Snapshot

Rs m, standalone	FY19	FY20	FY21	FY22	FY23
Net Sales	0.0	2.2	2.7	11.1	3.1
Growth (%)	-64%	5400%	24%	307%	-72%
Operating Profit	-3.7	2.3	-8.4	8.4	2.5
OPM (%)	-	103%	-	76%	79%
Net Profit	-11.9	-62.8	-8.5	8.4	2.8
Net Margin (%)	-	-	-	75%	91%
ROE (%)	0.0	0.0	-51.5	50.9	12.9
ROCE (%)	-8.2	-578.6	-48.8	44.7	10.1
Dividend (Rs)	0.0	0.0	0.0	0.0	0.0
Debt to Equity (x)	-1.0	0.0	0.1	0.2	0.0

Data Source: Ace Equityiny

As per its latest shareholding pattern, promoters of the company hold over 74.5% stake.

To know more, check out its detailed shareholding pattern here.

#4 Maagh Advertising (1,140%)

Next on this list is Maagh Advertising.

Shares of the company have shot up by 1,140% in the past one year.

Trading at less that two rupees a year ago, shares currently trade at Rs 14.6 per share, which translates into 1,140% gains.

The primary reason for this rally can be attributed to strong quarterly numbers posted by the media company for first two quarters of current financial year.

Owing to strong quarterly earnings, the company looks set to surpass FY23's full year profit and revenue estimates. This has sparked a sharp rally.

Financial Snapshot

Rs m, standalone	FY19	FY20	FY21	FY22	FY23
Net Sales	299.0	526.1	245.5	218.0	200.4
Growth (%)	-	76%	-53%	-11%	-8%
Operating Profit	15.6	18.8	18.6	14.2	14.7
OPM (%)	5%	4%	8%	6%	7%
Net Profit	5.0	7.8	7.2	5.3	5.1
Net Margin (%)	2%	1%	3%	2%	3%
ROE (%)	22.8	30.8	22.5	13.7	6.0
ROCE (%)	30.7	38.9	29.6	18.5	8.4
Dividend (Rs)	0.0	0.0	0.0	0.0	0.0
Debt to Equity (x)	0.0	0.0	0.0	0.0	0.0

Data Source: Ace Equity

Apart from that, momentum also got a boost following a stock split and bonus issue by the company.

Maagh Advertising started hitting back-to-back 52-week highs after the penny stock turned ex-split and ex-bonus in February 2024.

Maagh Advertising provides data-driven marketing and advertising solutions.

The company gathers campaign-specific market & competitor data, intelligent insights, audience interests, etc. to serve businesses of every scale in major industries.

It issued preference shares last year for acquisition of Multi-Speciality Management Services.

The SME company came out with its IPO in September 2022 at a price band of Rs 60 per share.

In the December 2023 quarter, there was a big change in its shareholding as promoter holding came down to 9.8% from 53.4% in September 2023.

#5 Innovative Ideals (1,104%)

The fifth company on this list of penny stocks that rallied over 1,000% is Innovative Ideals.

Shares of Innovative Ideas traded at Rs 2.6 per share last year in April and skip forward to today, shares have shot up to Rs 31.2 per share.

What's surprising is that these gains have come despite the company posting repeat losses in its quarterly earnings for the current financial year.

Even if we look at its historical performance for the past five years, the company is reeling in losses.

Financial Snapshot

Rs m, standalone	FY19	FY20	FY21	FY22	FY23
Net Sales	255.8	125.3	34.9	46.0	35.8
Growth (%)	26%	-51%	-72%	32%	-22%
Operating Profit	54.9	-24.3	-60.6	-48.3	-35.8
OPM (%)	21%	-19%	-173%	-105%	-100%
Net Profit	44.2	-29.6	-58.7	-49.4	-72.4
Net Margin (%)	17%	-24%	-168%	-107%	-202%
ROE (%)	24.3	-12.5	-29.5	-34.1	-86.2
ROCE (%)	30.0	-8.0	-18.6	-16.1	-36.1
Dividend (Rs)	0.0	0.0	0.0	0.0	0.0
Debt to Equity (x)	0.2	0.5	0.9	1.4	3.8

Data Source: Ace Equity

So what explains the steep rally?

Well, the rally could be attributed to the company's business segment anticipated to show strong demand in the coming years. Innovative Ideals provides services of system integration for security, safety and building automation an installation of various electronic systems.

It provides range of services like video door phone, audio door phone, access controls, home automation systems, intrusion alarm system, CCTV systems, and fire alarm systems.

To know more, check out its financial factsheet and its latest quarterly results.

#6 Rajnish Retail (1,015%)

Last on this list is Rajnish Retail.

Erstwhile known as Sheetal Diamonds, Rajnish Retail manufactures, trades and exports loose diamonds and jewellery.

In the past one year, shares of the company have rallied over 1,000%.

Rajnish Retail traded at Rs 5.5 per share back in April 2023. Skip forward to today and shares of the company trade at Rs 61 per share with a marketcap of Rs 1,870 million.

Investors turned bullish on this multibagger penny stock after it announced a fund raise via issuance of preferential issues.

The company informed exchanges in December 2023 that the move aims to raise Rs 499.5 million, which will be used for setting up retail stores across India.

This is the reason why promoter holding went up to 26.7% in December 2023 quarter as its promoter, Rajnishkumar Singh, subscribed to 18,00,000 shares.

Singh, who is also the visionary behind the success of Rajnish Wellness, had earlier completed the acquisition of Sheetal Diamonds. As a result of conditions of open offer and change in control of management, the new board is led by Rajnishkumar Singh among others.

Coming to its financials, the company has shown little improvement over the years, and its hoping to turn profitable this year, all thanks to positive bottomline posted in the past two quarters of the current financial year.

Financial Snapshot

Rs m, standalone	FY19	FY20	FY21	FY22	FY23
Net Sales	201.1	183.4	226.0	211.3	31.6
Growth (%)	3%	-9%	23%	-7%	-85%
Operating Profit	-1.5	-0.9	4.7	-0.2	-2.0
OPM (%)	-1%	0%	2%	0%	-6%
Net Profit	-2.0	-1.5	3.7	-1.6	-3.0
Net Margin (%)	-1%	-1%	2%	-1%	-10%
ROE (%)	-5.9	-4.5	11.0	-4.5	-9.3
ROCE (%)	-5.1	-3.4	11.2	-3.9	-9.5
Dividend (Rs)	0.0	0.0	0.0	0.0	0.0
Debt to Equity (x)	0.0	0.1	0.0	0.0	0.0

Data Source: Ace Equity

To know more, check out Rajnish Retail financial factsheet.

Which Other Penny Stocks Rallied the Most in FY24?

Apart from the above 6, here are some other penny stocks that delivered phenomenal returns in financial year 2024.

Best Penny Stocks of FY24

Company	Price in April 2023	Current Price	Change (%)	Current Market cap (Rs m)
Rudra Ecovation Ltd.	4.3	42.4	897%	3,654
Empower India Ltd.	0.3	3.1	894%	3,584
Unitech Ltd.	1.2	11.2	858%	29,329
Kisan Mouldings Ltd.	6.4	60.5	849%	2,050
Markobenz Ventures Ltd.	5.8	47.5	724%	911
Madhuveer Com 18 Network Ltd.	10.3	82.8	707%	785
Trishakti Industries Ltd.	8.4	65.5	683%	982
Aerpace Industries Ltd.	1.6	12.7	679%	1,729
Miven Machine Tools Ltd.	12.6	93.2	643%	280
Constronics Infra Ltd.	6.1	45.3	643%	327
Sudal Industries Ltd.	6.1	44.4	629%	371
Gayatri Sugars Ltd.	3.1	18.8	512%	1,217
NDA Securities Ltd.	11.1	66.0	497%	393
Mercury Ev-Tech Ltd.	13.5	80.0	492%	14,040
Vintron Informatics Ltd.	4.1	23.8	483%	1,865
Marsons Ltd.	6.4	36.7	478%	5,141
Ace Software Exports Ltd.	16.5	91.2	453%	584
Kay Power and Paper Ltd.	8.4	45.5	444%	484
HB Leasing & Finance Company Ltd.	3.5	18.8	441%	208
Adline Chem Lab Ltd.	5.4	28.7	431%	168
PVP Ventures Ltd.	7.4	38.0	413%	9,890
Suzlon Energy Ltd.	7.9	40.5	412%	550,905
Promact Impex Ltd.	2.9	14.5	408%	95
Vikalp Securities Ltd.	5.6	28.1	402%	86
Spice Islands Apparels Ltd.	7.2	35.8	398%	154

Data Source: Ace Equity, Equitymaster

Since you're interested in penny stocks, check out the below screens on Equitymaster's stock screener.

We have a separate section specifically for penny stocks.

• Best Indian Penny Stocks with Dividend Growth
• High Dividend Yield Penny Stocks in India
• Debt Free Penny Stocks in India
• Undervalued Penny Stocks in India
• Best Penny Stocks Under Rs 50

What Next for Penny Stocks in 2024?

Here's what Rahul Shah, editor of penny stock recommendation service Exponential Profits at Equitymaster, has to say about the outlook for penny stocks in 2024:

• After a stellar 2023, I was expecting smallcaps and penny stocks to have a subdued 2024 and perhaps even witness a small correction.
  
  Little did I know that the correction will come this fast and a pretty steep one at that.
  
  However, I believe that there is no need to panic in view of the current decline in smallcaps and penny stocks.
  
  Our strategy of having a fixed deposit allocation has been designed for precisely such occasions.
  
  It has not only allowed us to lose less than the broader index but also keep some cash handy to buy beaten down stocks at attractive valuations. Whether to have 50% allocation or the minimum 25% allocation to stocks is individual skill, judgement or even luck.
  
  Do not try to make your luck by buying stocks based on market rumours or the hottest trends. But put yourself in a position to be lucky by buying fundamentally strong penny stocks with solid track record and then try to buy them cheap.
  
  It's all about keeping things simple and sticking to the discipline of adjusting your penny stock exposure based on the broader market valuations. Trust me, this is more than enough to earn good long term returns from penny stocks.

In case you need more help to identify such stocks, you can watch the below video where Rahul has shared more details.

Since penny stocks interest you, check out Equitymaster's YouTube channel that has a separate playlist for penny stocks.

Happy penny stock investing.

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...