Lloyds Enterprises: Up 2337%, this penny stock turned ₹1 lakh into ₹24 lakh in 4 years
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Penny stock Lloyds Enterprises has posted multibagger returns in the last 4 years, rising from ₹1.19 in March 2020 to around ₹28.8 currently. This implies a return of almost 2337%.
An investment of ₹1 lakh in this stock in March 2020 would have turned into over ₹24 lakh now.
Lloyds Enterprises Limited trades in iron and steel products in India. It also designs and manufactures heavy equipment, machinery, and systems for hydrocarbon, and oil and gas sectors, as well as steel plants, power plants, nuclear plant boilers, turnkey projects, etc. The company was formerly known as Shree Global Tradefin Limited and changed its name to Lloyds Enterprises Limited in September 2023. Lloyds Enterprises Limited was incorporated in 1986 and is headquartered in Mumbai, India.
The stock has surged over 333 percent in the last 1 year and lost over 24 percent in 2024 YTD, giving negative returns in 2 of the 3 months this year so far.
It has shed over 24 percent in March so far, after an over 3 percent decline in February and an over 3 percent surge in January this year.
Currently trading at ₹28.8, the stock is almost 40 percent away from its record high of ₹47.75, hit on October 17, 2023. Meanwhile, it has soared over 371 percent from its 52-week low of ₹6.12, hit on March 29, 2023.
The substantial surge in value indicates a robust wave of market confidence and favorable sentiment towards the stock, marking a noteworthy achievement for the company in the present market conditions.
Earnings
In the December quarter (Q3FY24), the company posted a significant multifold surge in its net profit at ₹48.20 crore as against ₹1.27 crore in the year-ago period. Meanwhile, the company’s revenue also soared to ₹122.72 crore versus ₹1.81 crore in the same period of the previous fiscal year.
Brokerage view
As per ICICI Direct’s analysis, the company is experiencing an increase in net cash flow and cash generated from its operational activities. Moreover, it has also posted good quarterly growth in the recent results. Also, the stock passes the majority of CANSLIM Investment criteria, added the brokerage
Meanwhile, its weaknesses, as per the brokerage are –
– Negative Breakdown First Support (LTP < S1)
– Weak performer: Stock lost more than 20 percent in 1 month
– Weak momentum: Price below Short, Medium and Long Term Averages
What are penny stocks?
Penny stocks are shares of small companies trading at low prices, often tied to startups or those facing financial challenges. These stocks are known for their low market capitalisation, limited trading volume, and speculative nature. Typically associated with early-stage ventures, they carry heightened risks due to their volatile price movements and difficulties in buying or selling shares without impacting prices.
Furthermore, penny stocks often operate in a regulatory environment with less oversight compared to larger firms, leaving them vulnerable to potential fraud or manipulation. While their low cost may attract investors seeking high returns, caution is necessary. Diligent research, thorough analysis, and effective risk management are essential when considering investments in penny stocks to navigate the inherent uncertainties and minimise potential losses.
Disclaimer: This story is for educational purposes only. Please speak to an investment advisor before making any investment decisions.
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Published: 26 Mar 2024, 03:10 PM IST
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