Multibagger! Penny stock Blue Chip India soared 2600% in 4 years, 671% in 1 year
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Shares of financial firm Blue Chip India have given stellar returns to their investors in the last 1 year. This penny stock has soared 671 percent in this period, from ₹0.35 in March 2023 to currently trade at ₹2.7. Meanwhile, in the last 4 years, since March 2020, the stock has given multifold returns, skyrocketing 2600 percent from ₹0.1.
However, in 2024 YTD, the stock is up just 10 percent, despite giving positive returns in 2 of the 3 completed months of 2024. It lost almost 17 percent in March after surging over 27 percent in February and 4 percent in January.
The stock has rallied 451 percent from its 52-week low of ₹0.49, hit on April 3, 2023, but is still 24.5 percent away from its 52-week high of ₹3.58, hit on March 5, 2023.
Blue Chip India Limited engages in financing activities in India. It sells equity shares; and provides loans. Blue Chip India Limited was incorporated in 1993 and is based in Kolkata, India.
Earnings
In the December quarter, the net profit of Blue Chip India was at ₹0.02 crore as against a net loss of ₹0.03 crore during the previous quarter ended December 2022. Meanwhile, there were no sales reported in the quarter ended December 2023 as well as during the previous quarter ended December 2022.
Brokerage view
According to ICICI Direct’s analysis, Blue chip India exhibits several strengths, including strong annual EPS growth, indicative of its consistent profitability over time. Additionally, the company has demonstrated effective capital utilisation, leading to an improvement in Return on Capital Employed (RoCE) over the past two years. Moreover, Blue chip India has been efficiently leveraging shareholders’ funds, as evidenced by the improving Return on Equity (ROE) trend observed over the same period. These strengths underscore the company’s ability to generate profits, optimise capital utilisation, and deliver value to its shareholders.
Meanwhile, its weaknesses, as per the brokerage, are –
– Rising other income, and low operating income
– Weak revenue and profit
– Declining net cash flow: Companies not able to generate net cash
About penny stocks
Despite their potentially high returns, it’s crucial to acknowledge that penny stocks come with significant risks and may not be suitable for all investors, especially those with a risk-averse approach. Only investors comfortable with high-risk investments and willing to allocate a very small portion of their portfolio should consider investing in penny stocks. Consulting a financial advisor before making any investment decisions is highly recommended.
Penny stocks pose several challenges due to their characteristics as small, often obscure companies with minimal analyst coverage and limited publicly available information. Additionally, the lack of transparency and accessibility to management insights further complicates investment decisions.
Furthermore, penny stocks are susceptible to various risks, including illiquidity, high-impact costs, and challenges associated with low trading volumes. Unless there are compelling reasons backed by thorough research, investing in penny stocks is generally not advisable for serious, long-term investors seeking stability and growth in their portfolios.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.
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Published: 02 Apr 2024, 12:06 PM IST
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