2023's Best Performing Penny Stocks that Rallied upto 1,400%

Penny stocks are favourites of retail investors in the Indian stock market. These stocks hold the promise of providing multibagger gains within a matter of months.

The penny stocks effect is simple in theory - these smaller companies have better growth opportunities than large companies, at the same time having a smaller base.

In addition, these companies are barely covered by analysts, leading to pricing inefficiencies.

The flip side? Since these companies are small, there's a higher chance of them going bust due to mismanagement or harsh economic conditions.

All of this means that you're taking some extra risk by investing in penny stocks and should be rewarded with higher-than-market returns.

Despite all these risks that they come with, penny stocks are almost always popular. The only time when they're shunned is during bear markets.

In today's article, let's look at the best performing penny stocks of 2023.

#1 Andhra Cements

First on the list is Andhra Cements.

The company manufactures cement in Andhra Pradesh and was part of the Jaypee Group.

After defaulting on loan repayments in 2021, the company was submitted to the NCLT and it paused operations between 2020 and February 2023.

Post that, it has seen a steady recovery. The company was acquired by Sagar Cements in March 2023 through the Insolvency and Bankruptcy Code (IBC) route for a little over Rs 10 billion (bn).

When Andhra Cements was acquired, 95% of its total equity was transferred to Sagar Cements, which the latter plans to bring down to 75% in the next three years.

Since only 5% of the total outstanding was with retail investors, shares of the company witnessed a steep rally on the back of low-free float.

Between 1 January 2023 till date (28 November 2023), shares of Andhra Cements have rallied over 1,400%!

While many believe the rally is only due to its low free float, there are some compelling reasons that place Andhra Cements in a healthy position.

Both the companies now enjoy synergies and this acquisition helped Sagar Cements move forward with its ambitious goal of achieving 10 million tonnes capacity by 2025. It also strengthened the company's position in the southern markets.

#2 Sheetal Diamonds

Next on this list is Sheetal Diamonds.

The company manufactures, trades and exports loose diamonds and jewellery.

In 2023 so far, shares of the company have spiked over 1,100%, rising from Rs 4.6 in January 2023 to Rs 56 at present.

As can be seen from the above chart, shares of the company saw a spike recently in October 2023.

This was after Rajnishkumar Singh acquired around 26% stake in company. He's the man behind the success of Rajnish Wellness' medical discount stores.

In September 2023, he acquired a 26% stake in the company from the promoter.

Ultimately, the company's board approved the induction of Rajnishkumar as the promoter and chairman of the company.

The company recently changed its name from Sheetal Diamonds to Rajnish Retail.

It has also proposed to raise funds by way of issue of equity shares or warrants through preferential issue.

In the September 2023 quarter, FIIs invested in the company and took their stake from nil to 2.5%.

For more, check out Sheetal Diamond's latest shareholding pattern.

#3 Intellivate Capital Ventures

Next on this list is Intellivate Capital Ventures.

Trading at less than Rs 10 in January this year, shares of the company spiked to Rs 110 in October 2023 before erasing some gains in November.

At present, shares of the company trade at Rs 92, having registered over 700% gains in 2023 so far.

The company is engaged in the business of consultancy and advisory services. It offers advisory on financial and corporate issues along with funding to companies in different sectors.

It also provides integrated solutions to clients through merchant banking.

According to the company's annual report, it's all set to foray into the quick service restaurant (QSR) business.

It decided to foray into the sector last year after acquiring 95% of the shareholding of Boutonniere Hospitality, which is engaged in the food chain business.

Boutonniere Hospitality holds majority stake in the coffee chain Barista Coffee Company and 100% stake in Kaizen Restaurants which owns Kylin Experience, Kylin Express, Kylin Skybar and Wanchai.

In FY23, the company posted revenue and profit of Rs 620 million (m) and Rs 30 m respectively as compared to zero business in FY22.

It has seen significant improvement in profit and revenue in the past four quarters and looks set to close FY24 on a strong note. This explains the rally we've seen so far in the stock.

#4 Gayatri Sugars

Next on the list is Gayatri Sugars.

The company is based in Hyderabad, and manufactures white crystal sugar and rectified spirit/extra neutral alcohol.

It has sugarcane crushing capacity of 7,000 tonne per day, while the distillery and co-generation units have 45 kilolitre per day and 25-megawatt capacities, respectively.

In 2023 so far, shares of the company have rallied 620%.

The sharp rally in this stock could be attributed to two factors - one is sectoral tailwinds and the second reason being the company staging a sharp turnaround in FY23.

Sugar stocks have seen a sharp rally this year tracking the ethanol megatrend, rise in sugar prices, and fears of decline in production of sugarcane.

These factors combined have increased the likelihood of sugar companies reporting better margins in FY24.

Meanwhile, after 4 consecutive years of losses, Gayatri Sugars posted a profit of Rs 340 m in FY23 on revenue of Rs 3.9 billion (bn).

To put things into perspective, it was posting same revenues in earlier years too ranging between Rs 3-3.6 bn but was unable to churn out profit.

If the company is able to maintain this growth rate in the coming years, it could be a key player in the sugar/ethanol segment to track.

#5 Mercury EV-Tech

Fifth on this list is Mercury EV-Tech.

The company is involved in the EV space, and it manufactures several EV models.

Most of its models are now awaiting approval from the international centre for automation technology (ICAT).

In 2023 so far, shares of the company have rallied over 550%.

Sure, you would think that adding 'EV' in the company name might do wonders but in reality, Mercury EV Tech has a couple of things working in its favour.

During the pandemic, shares of the company started trading at Rs 0.36. It's marketcap was just Rs 7 million. Prior to this, this microcap stock had regular intervals where it stopped trading for months.

After it resumed trading in March 2020, the market regulator had imposed norms at regular intervals, and it was only after January 2022 that the stock was allowed to trade on the BSE on all days.

The company came under investors radar in June 2023, not because of the spectacular gains it has registered but because the market regulator recently put the company under ESM framework.

In June 2023, SEBI and the exchanges jointly decided to introduce the ESM framework for highly volatile "micro-small" companies, with a marketcap of less than Rs 5 bn.

Mercury EV-Tech challenged this decision and took it to the Securities Appellate Tribunal. Here's what the company's promoter has to say...

• It is difficult for our shareholders and our company. The exchange and the regulator should consider a company's business model before taking such a step.

As things stand now, the company is yet again locked in the 5% upper circuit band as investors just can't get enough of this EV penny stock.

The company recently inked an agreement with SRBH Motors, which has developed commercial electric vehicles in the past like E-Tipper, E-Prime Movers, E-Dragger, E-Mini Bus, Cargo Containers.

Both these companies will also start manufacturing Cargo Containers.

The next leg of growth for Mercury EV-Tech could come from its CED coating plant, which is expected to start commercial production soon.

It's the first CED plant and in this segment, Mercury EV Tech claims it's the only company with such an expansive facility.

#6 Blue Cloud Softech

Next on this list is Blue Cloud Softech Solutions.

The company is involved in designing and developing computer software and providing data processing services.

It also develops software products, solutions, customisation, provides technical support, and training.

In 2023 so far, shares of the company have rallied around 450%. It started the year at Rs 13 per share and currently, the shares trade at around Rs 74 per share.

The company has a marketcap of Rs 15 bn.

Ever since the company increased its liquidity back in 2022, shares have been on an upward trajectory.

There are other reasons behind the rally too including reducing debt, improving returning equity and a significant improvement in its net cash flows.

In FY23, the company reported a 100x increase in its sales to Rs 290 m from less than Rs 2 m a year ago in FY22. Profit after tax rose more than 5x to Rs 7 m.

The company has low debt on its books and its net profit has been improving for the past couple of years.

#7 Geekay Wires

Next on this list is Geekay Wires.

The company is engaged in manufacturing of niche quality galvanized steel wires and nails.

These products find applications in power transmission, cable & conductor, general engineering, construction, among other segments.

In 2023 so far, shares of the company have rallied over 400%. The company is only listed on the NSE.

The sharp rally comes on the back of improved financials for FY23.

Last year, it completed its expansion project by taking the installed capacity to 3x from the year ago and also commenced the process of setting up a nail manufacturing unit.

Net profit shot up to Rs 240 m from Rs 90 m while sales spiked to Rs 4 bn compared to Rs 2.6 bn in FY22.

The company's board had declared a stock split in 1:5 ratio in October 2023.

#8 Servotech Power Systems

Last on this list is Servotech Power Systems.

It's a smallcap electric equipment manufacturing company, producing solar products, medical equipment, and energy solutions.

The company offers lighting and solar products such as fans, solar home lighting systems, bulbs, and panels.

In 2023 so far, shares of the NSE-only listed company have zoomed around 380%.

The rally started when its board decided to split the company's shares in a 1:5 ratio in December 2022, taking is face value down from Rs 10 to Rs 2.

In fact, the company further underwent one more stock split in July 2023, taking its face value down to Re 1.

It had announced a split of its equity shares in a 1:2 ratio to enhance the liquidity and to encourage wider participation in May.

Apart from the liquidity factor, the other reason why shares are on an uptrend is because the company is involved in high growth sectors like solar and EV charging.

The company continues to receive orders in this segment, and the effect can be seen in its operating profits, which has been improving continuously.

Just last week, it bagged an order for electric vehicle (EV) chargers from state-run oil marketing firm Bharat Petroleum Corporation (BPCL).

The order is for 2,649 AC EV chargers. BPCL has earlier worked with Servotech to transform the E-Mobility landscape.

The company is currently issuing warrants and foreign investors (FIIs) have shown quite an interest.

Top Performing Penny Stocks of 2023

Apart from the above eight stocks, which have sufficient daily trading volumes and a market cap exceeding Rs 1 bn, here are other penny stocks that rallied the most in 2023.

For the below stocks, there's no filter for market cap and daily trading volume.

Multibagger Penny Stocks of 2023

Company	CMP (Rs)	Gains in 2023 (%)
Avance Technologies Ltd.	0.59	1495%
Archana Software Ltd.	36.46	939%
Tine Agro Ltd.	98.92	861%
J Taparia Projects Ltd.	58.01	772%
Empower India Ltd.	1.19	693%
Innovative Ideals & Services (India) Ltd.	28.55	546%
Mena Mani Industries Ltd.	8.93	524%
Alfa Transformers Ltd.	70.39	499%
Fundviser Capital (India) Ltd.	71.13	458%
Hiliks Technologies Ltd.	36.99	455%
Classic Filaments Ltd.	34.6	450%
Padam Cotton Yarns Ltd.	51.96	436%
Softrak Venture Investment Ltd.	7.84	416%
Trans India House Impex Ltd	33.53	406%
Ganesha Ecoverse Ltd.	81.05	399%
Lloyds Enterprises Ltd.	37.54	369%
Regis Industries Ltd.	92	359%
Himachal Fibres Ltd.	23.97	337%
Adline Chem Lab Ltd.	22.97	333%
NMS Global Ltd.	70.98	306%

Data Source: Ace Equity

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

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...