Top 10 Fundamentally Strong Stocks Under Rs 100

Stocks trading below Rs 100 with a lower marketcap are attractive to investors because of obvious reasons... they come with the potential for high returns.

But to navigate this terrain successfully, it is important to seek out businesses that have strong fundamentals, so they can withstand the test of time.

Keeping that in mind, let's look at 10 such fundamentally strong stocks that are currently trading below Rs 100.

Please note, we've only considered the companies that have a lower marketcap... basically, we're listing out penny stocks (shares of companies under Rs 100 with a lower market capitalisation).

#1 Rubfila International

First on this list is Rubfila International.

Trading at Rs 74 per share with a marketcap of Rs 4 billion (bn), Rubfila International specializes in tyre and rubber products.

It's one of India's largest manufacturers of heat resistant rubber threads, and the only Indian company to manufacture both talcum and silicon-coated rubber threads.

The company is part of the Finquest Group, which has interests in finance, textiles, paper, among other segments. The group owns brands like Reid & Taylor and Digjam.

It derives around 20% of its revenue from exports and the rest from domestic markets.

In the past 5 years, the company's revenue has grown at a steady rate, led by high demand for rubber threads.

Although the margins have declined, the company can get back to double digit margins once its Tamil Nadu plant starts production with the enhanced capacity (post expansion).

Financial Snapshot

Rs m, consolidated	FY19	FY20	FY21	FY22	FY23
Net Sales	2,137	2,580	3,229	4,768	4,571
Growth (%)	0%	21%	25%	48%	-4%
Operating Profit	284	284	516	695	440
OPM (%)	13%	11%	16%	15%	10%
Net Profit	177	157	334	446	260
Net Margin (%)	8%	6%	10%	9%	6%
ROE (%)	13.9	11.6	19.1	20.6	10.7
ROCE (%)	18.9	15.4	25.8	27.9	14.5
Dividend (Rs)	1.0	1.2	1.3	1.8	1.2
Debt to Equity (x)	0.0	0.0	0.0	0.0	0.0

Data Source: Ace Equity

Going forward, the company has plans to set up new production lines to meet the demand of export markets.

The first quarter is expected to be good for Rubfila... as it has reported a spike in its topline and bottomline for every first quarter for the past few years.

Moreover, investors can also expect a dividend payment from Rubfila as it has been consistently paying dividends.

The company is also debt-free, leaving a higher scope for leverage in case of any expansion plans.

In 2024 so far, shares of the company have fallen around 10%.

#2 The Ugar Sugar Works

The second stock on this list is Ugar Sugar.

It currently trades at Rs 76 with a marketcap of Rs 8.6 bn.

The company is engaged in the manufacture and sale of sugar, industrial and potable alcohol, and generation and distribution of electricity.

In the past five years, the company has seen a sharp turnaround in its business, with revenues almost tripling and profit shooting up multifold.

The business got a big boost in FY23 owing to the company's diversification into ethanol production.

Financial Snapshot

Rs m, consolidated	FY19	FY20	FY21	FY22	FY23
Net Sales	7,502	8,704	9,555	11,375	17,942
Growth (%)	15%	16%	10%	19%	58%
Operating Profit	591	708	737	1,014	2,149
OPM (%)	8%	8%	8%	9%	12%
Net Profit	43	138	171	433	1,030
Net Margin (%)	1%	2%	2%	4%	6%
ROE (%)	9.0	24.0	23.9	43.3	60.6
ROCE (%)	7.8	9.7	10.1	12.9	29.7
Dividend (Rs)	0.0	0.1	0.2	0.3	0.5
Debt to Equity (x)	10.8	8.1	7.0	5.3	1.6

Data Source: Ace Equity

However, investors should not expect as good a year as FY23 for Ugar Sugar as this year in FY24, the company could not operate its recently commenced grain-based distillery plant at optimum capacity utilisation.

Moreover, surplus rice supplies were also halted, impacting the raw material availability.

All being said, the company overall looks in a sweet spot. The Indian government recently announced the Ethanol 100 mission.

As India takes a monumental step towards a sustainable future by aiming for a 20% ethanol blend to be used mainstream by 2025-26, Ugar Sugar is well placed with its ethanol production capabilities.

In 2024 so far, shares of the company have fallen around 7%.

#3 Pudumjee Paper Products

Third on our list is Pudumjee Paper Products.

The stock currently trades at Rs 68 per share with a marketcap of Rs 6.4 bn.

The company is engaged in the business of manufacturing specialty paper for wrapping, food grade packaging paper, household and sanitary paper, etc.

Pudumjee's market position is healthy, with a share of 30-40% in the various sub-segments of the domestic speciality paper industry.

The company also has strong fundamentals. Its revenue has grown at a CAGR of 9% in the last five years.

Net profit has grown even higher at a CAGR of 21% on account of better operating efficiency.

This has resulted in healthy return ratios. The company's RoE stands at 15.4x while its RoCE stands at 18.4x.

It has also reduced its debt over the last year. Its debt-to-equity ratio stands at 0.1x. Additionally, promoter holding stands strong at 71.3%.

Financial Snapshot

Rs m, consolidated	FY19	FY20	FY21	FY22	FY23
Net Sales	5,895	6,045	4,369	5,553	7,587
Growth (%)	18%	3%	-28%	27%	37%
Operating Profit	408	601	760	758	948
OPM (%)	7%	10%	17%	14%	12%
Net Profit	167	272	300	345	594
Net Margin (%)	3%	5%	7%	6%	8%
ROE (%)	6.7	10.1	10.2	10.6	16.1
ROCE (%)	10.4	14.0	11.4	13.1	19.4
Dividend (Rs)	0.2	0.2	0.3	0.5	0.5
Debt to Equity (x)	0.3	0.3	0.2	0.2	0.1

Data Source: Ace Equity

Going forward, Pudumjee Paper Products is set to benefit from an increase in paper consumption.

The Indian government's proactive initiatives, such as the Make in India campaign and the establishment of packaging parks, are providing a conducive environment for the packaging industry to thrive.

Moreover, the recent ban on single-use plastics has driven e-commerce businesses to adopt eco-friendly alternatives, such as paper-based packaging which is expected to lead to renewed demand for paper products such as straws, cups, and bags.

Shares of Pudumjee Paper Products are up by 31% in 2024 so far.

#4 Rajgor Castor Derivatives

Fourth on this list is Rajgor Castor Derivatives.

Listed only on the NSE, the stock currently trades at Rs 39 per share with a marketcap of Rs 922 million (m).

The company manufactures castor oil-based products for the Indian market.

Up until December 2021, the company was engaged in the business of trading agro commodities. However, in January 2022, it ventured into manufacturing business.

Now, the company has clients across lubricants, paints, pharma, rubber, textiles, among other industries.

Rajgor Castor was listed last year in October on the NSE SME platform. The company was listed at an 18% premium to its issue price.

Following repeat losses in pandemic years 2020 and 2021, the company was back to reporting profit in 2022 and in FY23, it posted a 10x growth in its sales YoY.

Financial Snapshot

Rs m, consolidated	FY19	FY20	FY21	FY22	FY23
Net Sales	1,127	140	97	397	4,288
Growth (%)	-	-88%	-30%	307%	981%
Operating Profit	23	23	11	39	116
OPM (%)	2%	17%	12%	10%	3%
Net Profit	4	-10	-18	5	55
Net Margin (%)	0%	-7%	-18%	1%	1%
ROE (%)	8.3	-25.3	-75.1	29.7	43.2
ROCE (%)	6.9	4.3	-0.9	11.5	23.1
Dividend (Rs)	0.0	0.0	0.0	0.0	0.0
Debt to Equity (x)	4.4	6.1	15.3	9.0	1.9

Data Source: Ace Equity

In 2024 so far, shares of the company are down 14%.

#5 Bodal Chemicals

The fifth stock on this list is Bodal Chemicals.

The company is India's leading integrated dyestuff company and the largest domestic manufacturer of dye intermediaries.

It has a market share of 20% in the domestic dye intermediaries' market and 13% in the dyestuffs market. It's global market share is 6% and 3%, respectively, in dye intermediaries and dyestuffs.

Why should Bodal Chemicals be on your radar?

The company has state-of-the-art research and development (R&D) laboratories that it uses to develop new products and processes.

Recently, it also added benzene derivatives to its product portfolio.

Bodal Chemicals has also invested Rs 4 bn in a greenfield project to increase the capacity of speciality benzene downstream products. This is expected to be operational by December 2023.

Coming to its financial performance, the company's revenue has grown at a CAGR of 7% in the last three years, driven by capacity expansions. The net profit fell slightly due to high input costs.

The company also pays consistent dividends to its shareholders.

Financial Snapshot

Rs m, consolidated	FY19	FY20	FY21	FY22	FY23
Net Sales	14,235	13,748	12,264	20,553	15,743
Growth (%)	25%	-3%	-11%	68%	-23%
Operating Profit	2,495	1,481	1,025	2,369	1,450
OPM (%)	18%	11%	8%	12%	9%
Net Profit	1,432	872	420	1,042	380
Net Margin (%)	10%	6%	3%	5%	2%
ROE (%)	18.7	10.0	4.3	9.7	3.6
ROCE (%)	24.3	10.9	5.5	10.9	5.2
Dividend (Rs)	0.8	0.8	0.8	0.8	0.1
Debt to Equity (x)	0.2	0.3	0.5	0.6	0.7

Data Source: Ace Equity

With the new greenfield project expected to commence production, the company will benefit from higher production, which could improve sales and profit growth.

Bodal Chemicals shares are down 4% in 2024 so far.

#6 Mukka Proteins

Next on this list is Mukka Proteins.

Shares of the company currently trade at Rs 37 and it has a marketcap of Rs 11 bn.

The company is a leading player in Indian fish protein industry contributing 25-30% to the Indian fish meal and fish oil industry.

It sells products domestically and exports to 10+ countries. In the first half of financial year 2024, domestic market contributed 32% of sales while the rest came from exports.

Coming to its financials, FY23 was its best ever year all thanks to Peru. You see, on the back of favourable demand conditions amid reduction in fish meal from Peru, the company was able to capitalise on the situation.

It has also maintained a good relationship with key customers including Avanti Feeds, which has ultimately led to regular and repeat orders.

Financial Snapshot

Rs m, consolidated	FY19	FY20	FY21	FY22	FY23
Net Sales	4,088	5,492	6,038	7,705	11,771
Growth (%)	-	34%	10%	28%	53%
Operating Profit	263	316	318	542	943
OPM (%)	6%	6%	5%	7%	8%
Net Profit	143	132	90	242	441
Net Margin (%)	3%	2%	1%	3%	4%
ROE (%)	31.1	27.0	17.9	31.3	38.6
ROCE (%)	18.2	16.6	11.1	18.4	24.4
Dividend (Rs)	0.0	0.0	0.0	0.0	0.0
Debt to Equity (x)	1.9	2.5	2.4	1.8	1.7

Data Source: Ace Equity

Going forward, the company is planning to set up new manufacturing facilities in the eastern coastal states of India to have seamless access to raw materials.

The company recently raised Rs 2.2 bn via its IPO and was listed on 7 March 2024.

#7 Meghmani Organics

Next on the list is Meghmani Organics.

Trading at Rs 86 per share, Meghmani Organics is an India-based diversified chemicals company.

The company is engaged in manufacturing and selling pigment and agrochemical products.

The company's customer base includes multinational corporations (MNCs) and extends to more than 75 countries globally. It has six multifunctional production facilities located in Gujarat.

Over the years, the company has experienced steady growth in both top-line as well as bottomline.

The company reported a revenue of Rs 25.5 bn in FY23, which increased by 2.4% from Rs 24.9 bn in FY22. Revenue has grown at a rate of 15.9% CAGR since FY21.

While revenue scaled at a decent pace, the net profit of the company has saw a degrowth in FY23, from Rs 3 bn in FY22 to Rs 2.4 bn in FY23. These earnings have scaled at the rate of 8.1% CAGR since FY21.

Financial Snapshot

Rs m, consolidated	FY20	FY21	FY22	FY23
Net Sales	6,932	16,234	24,940	25,567
Growth (%)	-	134%	54%	3%
Operating Profit	2,417	3,046	4,772	4,599
OPM (%)	35%	19%	19%	18%
Net Profit	1,566	1,850	3,080	2,504
Net Margin (%)	23%	11%	12%	10%
ROE (%)	15.2	17.3	23.1	15.2
ROCE (%)	17.0	19.6	24.7	17.0
Dividend (Rs)	0.0	1.4	1.4	1.4
Debt to Equity (x)	0.3	0.2	0.3	0.5

Data Source: Ace Equity

Shares of the company have come under pressure in recent sessions owing to profit booking. Meghmani Organics saw a sharp rally after inaugurating its new plant at Ahmedabad.

The company posting a loss in its Q3 results also dampened sentiment.

Going forward, the company remains committed to expansion plans, further enhancing its presence in the global market and solidifying its position as a key player in the agricultural solutions industry.

Moreover, the company's foray into crop nutrition segment is expected to bode well over the long run.

In 2024 so far, shares of the company are up 10%.

#8 Ester Industries

Next on this list is Ester Industries.

The company's shares are currently trading at Rs 93 per share with a marketcap of Rs 7.8 bn.

Ester Industries manufactures packaging films and specialty polymers.

The company has been manufacturing packaging films for more than three decades and has established a good market position in the sector.

It has also diversified into various other segments such as specialty polymers over the years, but major portion of its revenue comes from the packaging films business.

Coming to financials, it has posted steady numbers in the past five years.

Financial Snapshot

Rs m, consolidated	FY19	FY20	FY21	FY22	FY23
Net Sales	10,281	10,387	9,918	11,103	10,775
Growth (%)	27%	1%	-5%	12%	-3%
Operating Profit	1,137	1,983	2,438	1,817	1,172
OPM (%)	11%	19%	25%	16%	11%
Net Profit	311	995	1,421	878	358
Net Margin (%)	3%	10%	14%	8%	3%
ROE (%)	10.4	27.5	30.7	15.4	5.1
ROCE (%)	14.1	28.9	32.4	17.4	7.4
Dividend (Rs)	0.5	2.5	3.4	3.3	0.5
Debt to Equity (x)	0.79	0.38	0.4	0.51	0.5

Data Source: Ace Equity

In FY24, the company's performance was dampened due to pricing pressure and due to the slowdown in the US markets.

Its film business is experiencing demand-supply imbalance and subdued demand in overseas markets.

The company recently posted its highest ever quarterly loss in as many as 5 quarters. In Q3, the company's net loss widened over four-fold due to lower offtake and weaker realization.

During the quarter, the company raised Rs 1 billion through preferential placement of equity shares to enhance liquidity.

It allocated 2.6 m shares to RJ Corp, parent company of Pepsi India bottler Varun Beverages for Rs 250 m.

Other funding came from parent group company Modi Rubber.

In its concall, the company mentioned that its film business is facing pressure in realizations and margins post commissioning of new facilities.

Going forward, the recent preferential issue to fund cash flow is expected to help meet obligations.

Meanwhile, the new plastic waste management rules requiring 10% recycled content in packaging materials are expected to boost demand for polyester film.

Shares of the company have remained range bound in 2024 so far.

#9 National Fertilizers

Next on the list we have National Fertilizers.

Trading at Rs 99 per share, the company is engaged in the production and marketing of neem coated urea, bio-fertilisers (solid & liquid) and other allied industrial products.

It's also engaged in trading of imported and domestic fertilisers, compost, seeds, and other agro products.

With a urea production capacity of over 3.6 MT, National Fertilizers is the second largest company in India in terms of urea capacity.

In FY23, the company posted its best financial results as the net profit spiked on the back of a subsidy worth around Rs 7 bn.

This was on account of the extension of the energy savings scheme.

Financial Snapshot

Rs m, consolidated	FY19	FY20	FY21	FY22	FY23
Net Sales	124,291	131,354	119,057	158,571	296,165
Growth (%)	39%	6%	-9%	33%	87%
Operating Profit	10,685	9,198	9,501	6,165	12,701
OPM (%)	9%	7%	8%	4%	4%
Net Profit	2,940	-1,811	2,371	-951	4,583
Net Margin (%)	2%	-1%	2%	-1%	2%
ROE (%)	14.0	-8.8	11.7	-4.5	19.8
ROCE (%)	11.4	1.6	8.9	1.7	15.6
Dividend (Rs)	1.9	1.0	0.0	0.0	2.8
Debt to Equity (x)	2.92	4.26	0.88	1.52	1.57

Data Source: Ace Equity

According to its management, the company's performance is expected to improve in the coming quarters, driven primarily by the profits in urea operations on account of lower energy consumption.

Promoters of the company, i.e., the government of India holds a 74.7% stake in the company which might be diluted in the coming years as it had earlier announced a 20% stake dilution by way of offer for sale.

Shares of the company have remained rangebound in 2024 so far.

#10 Lancer Container Lines

Last on this list is Lancer Container Lines.

Trading at Rs 72 per share, the company is a one-stop logistics solution provider.

The company provides shipping and logistics services in India and abroad. Its primary business is ocean transport services of intermodal containers by container ships.

In December 2023, FII holding in the company went up substantially from 11.5% to 23.5%. Before this, FIIs were on a selling spree, reducing exposure for the past four quarters.

This can be attributed to the acquisition of Transco Logistix Worldwide in November 2023.

Lancer Container Lines acquired 750,000 equity shares for Rs 10 per share equity share capital of Transco Logistix Worldwide.

The purpose of this investment was to add a vertical business line for the company in the logistics industry.

Apart from that, in December 2023, Lancer Containers integrated its subsidiary, Argo Anchor, in the city of Dubai.

This strategic move marks a milestone for the company as it extends its services to cater to the dynamic shipping needs and requirements of the Middle East region.

Coming to its financials, Lancer Container Lines has seen a sharp spike in topline as well as bottomline in the past 5 years.

Financial Snapshot

Rs m, consolidated	FY19	FY20	FY21	FY22	FY23
Net Sales	1,974	2,653	2,995	5,953	6,817
Growth (%)	80%	34%	13%	99%	15%
Operating Profit	212	233	247	494	823
OPM (%)	11%	9%	8%	8%	12%
Net Profit	82	80	88	271	400
Net Margin (%)	4%	3%	3%	5%	6%
ROE (%)	35.8	25.9	22.4	47.5	33.8
ROCE (%)	28.1	22.1	23.2	49.5	25.1
Dividend (Rs)	0.0	0.0	0.0	0.0	0.0
Debt to Equity (x)	1.28	0.87	0.51	0.35	1.61

Data Source: Ace Equity

This growth can be attributed to its commitment to increase containers and expand into new geographies.

Going forward, the company has major expansion plans for entering Africa, Latin America, Mediterranean, and Western regions.

The company is looking to launch a QIP to raise funds for adding more containers and tankers.

In 2024 so far, shares of the company have fallen around 15%.

In Conclusion

Retail investors often get attracted to stocks trading at low prices.

From a fundamental point of view, the price of the stock by itself doesn't have a lot of importance.

All being said, the fascination with stocks trading below Rs 100 has made the hunt for multibagger stocks a potentially rewarding activity.

In fact, well-known stocks that currently trade at high prices today, i.e. bluechip and largecap stocks, started out as stocks that were trading at low prices.

In conclusion, you can pick stocks under Rs 100 with 10x potential by looking at these criteria:

• Capable Management
• Competitive Advantage
• Promoter Holding
• History of Earnings
• Growth Opportunities

All these criteria taken together will help you find multibagger stocks under Rs 100.

Happy 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...