Best Stocks Under ₹5 in December 2024: Sunshine Capital, FCS Software and More- 5yr CAGR Basis

Stocks under ₹5 are low-priced shares of companies with small market capitalisation and are often illiquid. These stocks are known for their high volatility and can see large price changes in a short time. There is usually limited reliable information available about these stocks.

Stocks under ₹5 have the potential for higher returns because their starting price is very low. This means their prices can increase significantly compared to stocks with higher prices. However, due to their volatility and the common speculation surrounding them, it’s hard to determine if the price increase is sustainable or just driven by speculation. Investing in these stocks comes with high risk due to their unpredictable nature. Therefore, it is important to do thorough research before investing in them.

In this article, we’ll check some of the best stocks in India below ₹5 in December 2024, based on the 5-yr CAGR. 

Best Stocks Under ₹5 in December 2024 – 5yr CAGR Basis

Note: The stocks listed below ₹5 provided here are as of December 11, 2024, and are filtered based on:

1. 5-year CAGR (sorted high to low)
2. Net income > 0
3. Debt to equity ratio (Low)

Overview of Top Stocks Under ₹5 in December 2024

1.Sunshine Capital Ltd

Established in 1989, Sunshine Capital Ltd operates in the finance sector, focusing on share trading, financial services, and investment activities. Sunshine Capital engages in share trading, investment activities, and financial services. It has also expanded its operations to distribute third-party financial products and offer loans, such as unsecured personal and corporate loans.

Sunshine Capital Ltd’s financial performance showed revenue of ₹5.67 crore for the quarter ending September 2024, an increase from ₹2.88 crore in the previous quarter (June 2024). Net profit for September 2024 stood at ₹3.30 crore, up from ₹2.01 crore in June 2024. 

Key metrics: 

• Earning per share (EPS): -₹0.08
• Return on equity (ROE): -5.81%

2.Standard Capital Markets Ltd

Founded in 1987, Standard Capital Markets Ltd operates in the Non-Banking Financial sector. The company is registered with the Reserve Bank of India (RBI) as a Non-Banking Financial Company (NBFC). It is a non-deposit-taking and non-systemically important NBFC, classified as an NBFC-Investment and Credit Company (NBFC-ICC).

For the quarter ending September 2024, Standard Capital Markets Ltd reported a revenue of ₹9.91 crore, up from ₹8.04 crore in June 2024. However, the company faced a loss in the September quarter, with a net profit of -₹0.51 crore, compared to a profit of ₹1.75 crore in June 2024. 

Key metrics: 

• EPS: ₹0.04
• ROE: 3.05%

3.FCS Software Solutions Ltd

FCS SSL is an IT company that offers various IT and IT-enabled services such as software development, marketing, and support, primarily for corporate clients in sectors like BPO, software development, and e-learning. The company also leases out different types of properties, including IT infrastructure spaces, to individuals or businesses.

For the quarter ending September 2024, FCS Software Solutions Ltd reported a revenue of ₹8.42 crore, a slight decrease from ₹9.06 crore in June 2024. Net profit for September 2024 was ₹0.47 crore, down from ₹0.86 crore in June 2024.

Key metrics: 

• EPS: -₹0.05
• ROE: -2.74%

4.Monotype India Ltd

Monotype India Ltd provides a range of financial services, excluding insurance and pension funding. It invests in various securities, including shares, stocks, and bonds. Additionally, Monotype India Ltd finances industrial and other enterprises and offers financial advisory services to businesses, corporations, and other organisations.

For the quarter ending September 2024, Monotype India Ltd reported a significant rise in revenue to ₹25.33 crore, compared to ₹2.68 crore in June 2024. Net profit for September 2024 was ₹2.99 crore, up from ₹2.06 crore in June 2024. 

Key metrics: 

• EPS: ₹0.10
• ROE: -48.55%

5.Quadrant Televentures Ltd

Established in 1946, Quadrant Televentures Ltd offers a wide range of telecommunication services. These include voice calls, internet access, broadband data, and various value-added services such as Centrex, leased lines, VPNs, and voicemail.

For the quarter ending September 2024, Quadrant Televentures Ltd reported a revenue of ₹58.81 crore, slightly lower than the ₹63.10 crore recorded in the previous quarter. However, the company’s net loss widened to ₹32.34 crore compared to a net loss of ₹30.10 crore in the June 2024 quarter. 

Key metrics: 

• EPS: -₹1.99
• ROE: 4.88%

Things to Keep in Mind When Investing in Stocks Under ₹5

• High Risk: Stocks under ₹5 are highly volatile, which means they come with significant risk.
• Liquidity Issues: Even though these stocks are low-priced, they are often hard to buy or sell because there isn’t much investor interest.
• Lack of Information: Stocks under ₹5 usually have limited financial data and lack analyst coverage, making it difficult to determine their true value and potential.
• Manipulation: These stocks are vulnerable to schemes like “pump and dump,” where false information artificially increases their prices, only to drop sharply, leading to losses for investors.

Conclusion

While stocks under ₹5 are inexpensive, they are very volatile. When choosing such stocks in India, it’s important to research their financials and fundamentals thoroughly. Avoid buying based on tips or recommendations without proper analysis, and consider consulting a financial advisor. Be aware of the potential for future share dilution and be ready for the high risks involved.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.