Best Penny Stocks Under Rs 5: The Stock market is generally perceived as an easy place to make money. A typical assumption is that Investors flock to the market to pick up a stock at the price of a small chocolate and watch it grow multiple times its current price.
With this assumption, we set out to explore some penny stock opportunities. In our research, we picked up stocks with decent financials and a market price of not more than Rs 5. We made sure to pick stocks that are profitable in the near and have a decent business model.
In the article about best penny stocks under Rs 5, we will learn the basics of each Company like when it was founded and what industry it currently operates in. We will then glance through its sources of revenue & then look at how much revenue & earnings the Company reports.
Table of Contents
Best Penny Stocks Under Rs 5
Best Penny Stocks under Rs 5 #1 – Swasti Vinayaka Art & Heritage
is a diversified company with three revenue streams. First, it manufactures precious and semi-precious stones, paintings, and jewelry carvings. It also receives compensation against a property.
In addition to this, it has funds devoted to long-term investments in blue-chip stocks. The management makes use of fundamental analysis and an in-house technical analysis model to achieve consistent returns.
The Company earns 11.66% of its revenue from the sale of products while the remaining 88.34% is from the sale of services. Its FY23 revenue was Rs. 13 Cr, which increased by 26% from Rs. 10 Cr in FY22. Net Profit skyrocketed by 91%, growing from Rs. 1.53 Cr in FY22 to Rs. 2.92 Cr in FY23.
Swasti Vinayaka Art & Heritage Corp. has a low debt-to-equity ratio of 0.37 with high profit margins. The stock presently trades at an attractive price-to-book value ratio of 1.58 and has a promoter holding of 51%.
| Particulars | Amount | Particulars | Amount |
| CMP | ₹ 3.80 | Market Cap (Cr.) | ₹ 33.48 |
| EPS | ₹ 0.33 | Stock P/E (TTM) | 12.9 |
| RoE | 14.75% | RoCE | 14.00% |
| Promoter Holding (%) | 51.00% | Public Holding (%) | 49.00% |
| Debt to Equity | 0.37 | Price to Book Value | 1.58 |
| Operating Profit Margin (%) | 35.75% | Net Profit Margin (%) | 23.11% |
Best Penny Stocks under Rs 5 #2 – Seacoast Shipping Services
Founded in 2005 as a freight forwarders and shipping agents company, Seacoast Shipping Services Limited (SCSSL) has grown to become one of the largest freight forwarders in Gujarat.
SCSSL is among the top 3 freight forwarders handling service of agri-commodities exports in containers from Mundra port. It has been working as an international ship operator of modern dry bulk vessels carrying around 5.0 million mt of bulk /and unitized cargo across the oceans.
The logistics company offers integrated freight forwarding services with transportation of containers & cargo for stuffing, phytosanitary service & customs house clearing services. The Company’s clients include Coromandel, ArcelorMittal, Nirma, GlaxoSmithKline, Reliance & the Adani Group.
The Company’s revenue grew from Rs. 128 Cr in FY22 to Rs. 430 Cr by FY23, increasing by 236% in a year. Net Profits at the time increased by 460%, growing from 2.55 Cr in FY22 to Rs. 14 Cr in FY23.
This gives the Company a Return on Equity of 26% and Capital of 31.64%, despite having a very low net profit margin of 3.32%.
| Particulars | Amount | Particulars | Amount |
| CMP | ₹ 3.05 | Market Cap (Cr.) | ₹ 141.67 |
| EPS | ₹ 0.42 | Stock P/E (TTM) | 7.05 |
| RoE | 26.04% | RoCE | 31.64% |
| Promoter Holding (%) | 27.85% | Public Holding (%) | 72.15% |
| Debt to Equity | 0.46 | Price to Book Value | 1.15 |
| Operating Profit Margin (%) | 7.172 | Net Profit Margin (%) | 3.32% |
Best Penny Stocks under Rs 5 #3 – Ajooni Biotech
Ajooni Biotech is an Animal Healthcare Company that produces a variety of high-yielding cattle feed to improve the productivity of dairy farmers. The Company manufactures animal feed such as cattle feed, camel feed, cotton oil cake, mustard oil cake & a lot more.
Ajooni has a presence in 8 Indian states supplying over 10,000 farmers across the country. The Company has 3 commissioned manufacturing units. With these units, the Company has an Animal Feed-producing capacity of 60K MTPA. The Company supplies famous brands like Patanjali, IFFCO Kisan, Mother Dairy, Paras Dairy, and Saahaj Dairy.
During FY23, the Company reported a slow growth of just 1% in revenue, from Rs. 74 Cr in FY22 to Rs. 75 Cr in FY23. However, Net Profits increased by 8%, from Rs. 1.04 Cr in FY22 to Rs. 1.12 Cr in FY23.
Despite slow growth and low Net Profit margins, the Company maintains a good return on Capital employed of 18%. Also, the stock trades at a low Price Book Value of 1.01x. The Company also has a low Debt-to-equity of just 0.12x, allowing them to borrow for future expansion.
| Particulars | Amount | Particulars | Amount |
| CMP | ₹ 4.85 | Market Cap (Cr.) | ₹ 42.93 |
| EPS | ₹ 1.94 | Stock P/E (TTM) | 29.53 |
| RoE | 10.00% | RoCE | 18.00% |
| Promoter Holding (%) | 27.46% | Public Holding (%) | 72.53% |
| Debt to Equity | 0.12 | Price to Book Value | 1.01 |
| Operating Profit Margin (%) | 3.72% | Net Profit Margin (%) | 4.00% |
Best Penny Stocks under Rs 5 #4 – Inventure Growth & Securities Ltd
Incorporated in 1995, is in the business of providing stock broking and other such financial services. The Company deals with Equity, Derivatives, Commodity and provides depository services.
The Company operates the business through its 224 business locations which include branches, franchisees, and sub-brokers across India. The Company earns 36.52% of its revenue from Fees & Commission charged in the form of brokerage. Interest Income and Sale of Shares constitute 29.2% and 23.59% of revenue.
Inventure’s revenue increased by 2.74%, from Rs. 49.6 Cr in FY22 to Rs. 50.9 Cr in FY23. During the same period, the Company saw a drop in Net Profits of 33.62%, from Rs. 13.95 Cr in FY22 to Rs. 9.26 Cr in FY23.
| Particulars | Amount | Particulars | Amount |
| CMP | ₹ 2.95 | Market Cap (Cr.) | ₹ 225.12 |
| EPS | ₹ 0.11 | Stock P/E | 28.28 |
| RoE | 4.54% | RoCE | 6.24% |
| Promoter Holding (%) | 26.40% | Public Holding (%) | 73.60% |
| Debt to Equity | 0.13 | Price to Book Value | 1.07 |
| Operating Profit Margin (%) | 26.18% | Net Profit Margin (%) | 18.97% |
Best Penny Stocks under Rs 5 #5 – Mega Corporation
Mega Corporation is a public limited Non-Banking Financial Company established in March of 1985. The Company is registered with RBI as a Non-Systemically Important Non-Deposit-taking Financial Company, as it has assets under Rs. 500 Cr.
The Company earns 99% of its revenue from Interest Income, while 1% is Rental Income. Mega Corporation reported a revenue of Rs. 3.12 Cr in FY23, which increased by 10% from Rs. 2.84 in FY22. Total Comprehensive Income of the Company increased from a loss of Rs. 26 Lakhs in FY22 to a profit of 18 Lakhs in FY23.
| Particulars | Amount | Particulars | Amount |
| CMP | ₹ 2.20 | Market Cap (Cr.) | ₹ 22.20 |
| EPS | ₹ 0.02 | Stock P/E | 110 |
| RoE | 0.93% | RoCE | 4.87% |
| Promoter Holding (%) | 51.86% | Public Holding (%) | 48.14% |
| Debt to Equity | 0.54 | Price to Book Value | 0.92 |
| Operating Profit Margin (%) | 71.00% | Net Profit Margin (%) | 7.26% |
List of Penny Stocks Under Rs 5
The list below puts together the 10 Best Penny Stocks under Rs 5
| Name | CMP | Mkt Cap | PE Ratio |
| Swasti Vinayaka Art & Heritage | ₹ 3.80 | ₹ 33.48 | 12.9 |
| Seacoast Shipping Services | ₹ 3.05 | ₹ 141.67 | 7.05 |
| Ajooni Biotech | ₹ 4.85 | ₹ 42.93 | 29.53 |
| Inventure Growth & Securities | ₹ 2.95 | ₹ 225.12 | 28.28 |
| Mega Corporation | ₹ 2.20 | ₹ 22.20 | 110 |
| Vandana Knitwear | ₹ 2.07 | ₹ 21.08 | 167.27 |
| 7NR Retail | ₹ 0.68 | ₹ 16.24 | 68.00 |
| Genpharmasec | ₹ 4.89 | ₹ 132.62 | 100.85 |
| PrismX Global Ventures | ₹ 1.83 | ₹ 79.92 | 3.89 |
Conclusion
Penny Stocks can sometimes be lucrative opportunities, but at the same time, they carry immense risk. These investments can make or break your portfolio. Hence, great caution is necessary when it comes to investing in penny stocks.
The revenues of these Companies are generally extremely volatile. They overreact to a Bull Market as well as a Bear Market. They might also lack the required Corporate Governance as the Company does not have major research houses covering it, allowing them to fly under the radar.
With all that being said, Investors can however take a very small exposure to penny stocks if they are willing to increase risk in your portfolio. So, which stock do you find lucrative? Do you have a favorite penny stock that we missed covering in the article? Let us know in the comments below.
Written by Nasir Hussain
By utilising the stock screener, stock heatmap, portfolio backtesting, and stock compare tool on the Trade Brains portal, investors gain access to comprehensive tools that enable them to identify the best stocks, also get updated with stock market news, and make well-informed investment.
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