Watch out for these multibagger penny stocks with low PE and high ROE – hidden gems or risky bets?

Watch out for these multibagger penny stocks with low PE and high ROE – hidden gems or risky bets?

Kiran Shroff

About 1,679 shares have advanced, 2,077 have declined and 124 were unchanged on BSE.

Indian stock markets on Friday (December 10, 2023) with the BSE Sensex Index up 0.44 per cent to close at 69,825.60 and the NSE Nifty-50 Index up 0.33 at 20,969.40. About 1,679 shares have advanced, 2,077 have declined and 124 were unchanged on BSE.

The broader market saw a decrease on Friday, led by declines in the BSE Mid-Cap and Small-Cap indexes, which fell 0.16 per cent and 0.44 per cent, respectively. However, sectoral performance was varied, with the Information Technology index experiencing gains while the Utilities index suffered the most significant losses.

The market capitalization of BSE-listed companies was Rs 3,49,23,398.51 crore or approx. Rs 3.49 lakh crore as of December 10, 2023. On the same day, 358 stocks hit a 52-week high while 19 stocks touched a 52-week low.

Low PE and high ROE multibagger Penny Stocks often catch the eye of investors seeking explosive returns. These stocks are characterized by a low price-to-earnings ratio (PE) and a high return on equity (ROE), suggesting potential undervaluation and strong profitability. However, investing in such stocks carries inherent risks. Their low price can be a result of poor fundamentals, low liquidity or limited information available, making it difficult to assess their true potential. Moreover, their high ROE might not be sustainable and their price volatility can be significant.

Following is the list of penny stocks with low PE and high ROE:

Company Name 

LTP (Rs) 

PE (x) 

ROE (%) 

1-year returns (%) 

Alfa Transformers Ltd 

63.04 

6.9 

51.17 

443 

Padam Cotton Yarns Ltd 

55.1 

9.9 

33.53 

377 

Rishi Laser Ltd 

82.37 

9.8 

30.73 

222 

Pentokey Organy (India) Ltd 

59 

9.6 

32.25 

181 

Parker Agrochem Exports Ltd 

22.85 

6.0 

24.26 

131 

Unique Organics Ltd 

79.23 

15.1 

26.81 

113 

Bilcare Ltd 

77.55 

15.3 

30.47 

110 

Shalimar Wires Industries Ltd 

27.25 

14.7 

22.22 

110 

Mitshi India Ltd 

21.77 

12.9 

21.82 

107 

Cindrella Hotels Ltd 

68.5 

8.1 

25.73 

105 

Anmol India Ltd 

61.28 

16.5 

26.75 

104 

Stratmont Industries Ltd 

32.1 

18.4 

27.74 

101 

Do you hold any? Do let us know in the comments below

Disclaimer: The article is for informational purposes only and not investment advice. 

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