Best Penny Stocks Under Rs. 10 – Based on Fundamental Factors

Last Updated on Nov 11, 2024 by Vanessa Sequeira

Are you looking for the best penny stocks in India priced under Rs. 10? Penny stocks are often seen as high-risk, high-reward investments that can offer significant growth potential, especially when chosen carefully. In this article, we’ll explore some of the top penny stocks to buy today, especially penny stocks with good fundamentals, including debt-free options, dividend-paying stocks, and even the most active shares below Rs 10, that are capturing market attention. We’ll also look at the benefits and risks of investing in these low-price shares and discover how to identify the best penny stocks for 2024 with strong fundamentals. 

Note: To get the list of fundamentally strong penny stocks below 10 Rs., we used the Tickertape Stock Screener on 6th November 2024 using the below-mentioned parameters.

• Close price: Set the upper limit to 10
• Net income: Greater than 0 – Set the lower limit to 0
• Debt-to-equity ratio: Set to low

🚀 Pro Tip: Utilise Tickertape’s Market Mood Index to gauge market sentiment and make informed investment decisions based on real-time market data and trends.

Invest in the Best Stocks Selected by SEBI-Registered Analysts

Did you know that you can invest in readymade electric vehicle stock portfolios managed by SEBI-registered experts?

But, before that, let’s look at what smallcase is.

What is a smallcase?

smallcases are modern investment products that help investors build low-cost, long-term & diversified portfolios with ease. A smallcase is a basket or portfolio of stocks/ETFs representing an idea – an objective, theme, or strategy. They are created and managed by SEBI-registered experts.

Among 500+ smallcases, here’s the top smallcases you can check out:

Mi INDIA Top 10 smallcase by Weekend Investing

Equity & Gold smallcase by Windmill Capital

Disclosure for Mi INDIA Top 10

Disclosure for Equity & Gold

Note: The smallcases are mentioned only for educational purposes and are not meant to be recommendatory. Investors must conduct their own research and consult a financial expert before making any investment decisions.

Debt Free Penny Stocks Below Rs. 10

Note: The above list of top 10 penny stocks in India with zero debt is dated 6th November 2024 and is derived using the Tickertape Stock Screener. The following parameters were used for the purpose:

• Close price: Set the upper limit to 10
• Debt-to-equity ratio: Set the lower limit to 0

Note that the mentioned stocks in the above table have a debt-to-equity ratio of zero.

Most Active Stocks Under Rs. 10

Note: The data in the above table is from 6th November 2024. The stocks are filtered using Tickertape Stock Screener using the following parameters:

• Close Price: Set to 0.03 – 10
• Relative Volume: Sort from highest to lowest

Detail on the Filter Used to Sort the Top 10 Penny Stocks India – Most Active Shares

Relative Volume: Often called RVOL, this ratio displays the average volume of the stock over the previous 10 days divided by the average volume of the stock over the previous 91 days. The ratio helps understand how in demand the stock has been in the past few days.

Suppose the 10-day average volume is 10,000 and the 90-day average volume is 4,000; then the relative volume is 10,000/4,000 = 2.5. RVOL above 2 is considered to be a signal of high demand for the stock, and when a stock is in demand, the price tends to move up very quickly.

Dividend-Paying Stocks Under Rs. 10

Note: The data in the above table is from 6th November 2024. The  top 10 penny stocks are filtered using Tickertape Stock Screener using the following parameters:

• Close Price: Set to 0.03 – 10
• Dividend Yield: Sort from highest to lowest

Detail on the Filter Used to Sort the Highest Dividend Yield Stocks Under Rs. 10

Dividend Yield: The ratio is calculated as dividend per share (DPS) for the most recent fiscal year divided by the close price of the stock. The ratio is used to calculate the earnings on investment, considering only dividends declared. The higher the dividend yield, the better. One should always consider dividend yield when investing in a company’s stock, as it can be a significant part of the return that might be generated. High dividend yield stocks could be a good investment avenue to supplement any income needs.

Suppose DPS is Rs. 16 and the stock price is Rs. 250; the dividend yield is calculated as (16/250)*100 = 6.4%.

The term ‘penny stocks’ is quite popular in the investment world. The stocks that are traded at a very low price on the stock exchange are known as penny stocks. The liquidity of penny stocks may not be as high as that of large companies. Though a few penny stocks have the potential to yield multi-bagger returns within a few trading sessions, the returns can be due to the performance of the company. Usually, these can be ‘win or bust’ bargains for you. The risk associated with penny stocks is high.

Overview of the Best Low Price Shares to Buy Today

Brightcom Group Ltd

Brightcom Group Ltd operates at the forefront of the digital marketing and ad-tech industry, providing a suite of data-driven solutions such as programmatic advertising and audience targeting. The company leverages advanced analytics and AI-driven tools to enhance ad performance for clients worldwide. With a net profit margin of 18.55%, Brightcom Group demonstrates solid profitability, underscoring its efficiency in the highly competitive ad-tech landscape.

Hindusthan Udyog Ltd

Specialising in manufacturing engineering components, Hindusthan Udyog Ltd caters to a diverse clientele across multiple industries, focusing on quality and innovation in its product offerings. Over the last five years, the company has achieved an impressive revenue growth rate of 22.57% per annum, well above the industry average of 10.7%. Additionally, its net profit margin stands at a remarkable 94.99%, highlighting its robust financial health and profitability.

Pressure Sensitive Systems (India) Ltd

Known for its high-quality pressure-sensitive products, Pressure Sensitive Systems (India) Ltd caters to various sectors, including automotive and packaging. The company’s strong market positioning is backed by its impressive financial metrics, with a net profit margin of 40.52% and an outstanding return on equity (ROE) of 128.05%, indicating effective management and solid returns for shareholders.

Diligent Media Corporation Ltd

Diligent Media Corporation Ltd operates in the media sector, focusing on content creation and digital media distribution, serving a wide audience base. Over the last five years, it has experienced exceptional growth, with revenue increasing at a yearly rate of 164.83%, far exceeding the industry average of -0.44%. The company also boasts a substantial net profit margin of 68.64%, showcasing its strong profitability in the media industry.

Taparia Tools Ltd

Taparia Tools Ltd is a prominent player in the tools manufacturing sector, known for producing high-quality hand tools that meet international standards. The company has maintained steady growth, with a 5-year revenue growth rate of 11.37%, slightly surpassing the industry average of 10.7%. It holds a respectable net profit margin of 11.91%, reflecting its consistent performance and stability in the market.

Magnanimous Trade & Finance Ltd

Operating in the financial services sector, Magnanimous Trade & Finance Ltd offers a range of financial solutions. Over the last five years, it has shown remarkable expansion, with revenue growing at 143.99% per annum, compared to the industry average of 11.36%. Its net income has also surged, with a phenomenal growth rate of 366145.83% annually over the same period, significantly outperforming the industry’s 32.42% average growth.

Bentley Commercial Enterprises Ltd

Bentley Commercial Enterprises Ltd focuses on diversified commercial services and has established a strong market position. The company’s revenue has grown at a rate of 133.5% per year over the last five years, surpassing the industry’s 52.78% average. Its financial strength is further evidenced by a high net profit margin of 74.12%, reflecting strong cost management and profitability.

Cressanda Railway Solutions Ltd

Cressanda Railway Solutions Ltd specialises in providing advanced solutions for railway infrastructure and services, supporting the modernisation of rail networks. Despite operating in a challenging industry, the company maintains a solid net profit margin of 6.45%, underscoring its ability to generate consistent returns within a competitive sector.

Speedage Commercials Ltd

A diversified services provider, Speedage Commercials Ltd has shown impressive financial growth. Its revenue has surged by 132.75% annually over the last five years, compared to the industry average of 9.82%. Additionally, net income has grown by 131.05% per year during the same period, outpacing the industry average of 3.99%, highlighting the company’s strong financial trajectory.

Franklin Industries Ltd

Franklin Industries Ltd operates in the manufacturing sector, delivering high-quality industrial products. The company has sustained a healthy growth rate, with revenue increasing by 23.99% per annum over the past five years, well above the industry average of 11.36%. Its net profit margin of 20.51% underscores its profitability and operational efficiency within the industry.

How to Pick the Best Ultra-Penny Stocks Under Rs. 10?

• Back yourself with ample research: Don’t just park your funds in any random penny stock you come across. Perform background research on the fundamentals and financials of the stocks on your radar. 
• Don’t fall for unsolicited tips or stock recommendations: Don’t blindly buy any penny stock recommended by your friends, any trader you follow, or any random stock market website. Talk to your financial advisor before investing. 
• Check for the possibility of dilution in the future: These small companies offer new shares in the quest to raise more capital. Issue of new shares would result in dilution of the ownership of existing shareholders. A fall in share price is also accompanied. 
• Ask yourself whether you are ready to face the inherent risks: Penny stocks can be one bad news away from hitting the lower circuit. They are considered very risky investments.

How to Invest in Penny Stocks Below Rs. 10?

To invest in penny stocks below Rs. 10, you can easily find and filter them using a stock screener. Here’s a quick step-by-step guide to help you get started:

Step 1: Open Tickertape Stock Screener

Step 2: Set the ‘Close Price’ Filter

Set the ‘Close Price’ to below Rs. 10. This will help you filter out all stocks that are priced under Rs. 10, narrowing your list to only those low-priced shares.

Step 3: Add Additional Filters

To find the best penny stocks, add filters like market cap, P/E ratio, and net income. You can also include parameters such as low debt-to-equity ratio, high trading volumes, and positive EPS growth to identify fundamentally strong stocks.

Step 4: Analyse and Invest

Once you have your filtered list, you can analyze each stock further by checking its financial performance, sector trends, and historical returns. You can then invest directly through the platform if it matches your investment strategy.

That’s it! You have your curated list of penny stocks below Rs. 10. Explore, analyse, and invest wisely!

Benefits of Investing in Penny Stocks

• Low stock price: The price is the primary feature of penny stocks. You don’t have to invest a lot of money. 
• High gains: Penny stocks can provide high gains. But remember, the risk is equally high, which can cause you to lose your investment. 

Risks of Investing in Penny Stocks 

• High risk: Though penny stocks have the potential to give good returns, the risk is also equally high. They are highly volatile in nature. 
• Liquidity: Though penny stocks are available at a very low price, they are illiquid. As they carry high risks, investors can be sceptical about buying them.   

Why Do Penny Stocks Trade So Cheaply?

Being stocks of companies that have very small market capitalisation, penny stocks, including some of the best penny stocks in India, often trade at low prices, such as under Rs. 10. More often than not, there is no information available about the business prospects and foreseeable growth in revenues. This lack of transparency is common in many low price shares, including those featured on the penny stocks 2024 lists.

Therefore, most investors in penny stocks don’t have a long-term view of the investment. The scarcity of fundamental insights into penny stocks, particularly the best penny stocks to buy now, often reveals that these stocks are fundamentally weak, causing investors to pull out their stakes. Even promising shares under Rs 10, such as those on the 1 to 10 rupees share list, struggle to gain investor confidence over time.

Stock operators, too, follow penny stocks very keenly. They quickly offload their holdings stacked at lower levels when the stock price rises to a certain level, thereby bringing down the price again. This frequent trading pattern is another reason why stocks under Rs 10, including top penny stocks in India, trade cheaply and struggle to maintain a steady price level. As a result, even multibagger penny stocks and best penny stocks for long-term investment are often considered highly speculative.

Who Can Invest in Penny Stocks Below Rs. 10?

Investing in penny stocks below Rs. 10 can be appealing to certain types of investors. Here’s who might consider these low-priced stocks:

1. New Investors: New investors with a limited budget can enter the stock market with penny stocks under Rs. 10, providing exposure without large capital. However, be mindful of volatility and research thoroughly.
2. Risk-Tolerant Investors: Those with a high-risk appetite can consider penny stocks, as they come with potential for high returns but also significant risks. Diversification is key to managing exposure.
3. Short-Term Traders: Short-term traders and speculators who use technical analysis can benefit from the quick price movements of penny stocks, aiming for fast gains.
4. Experienced Investors: Seasoned investors seeking multibagger opportunities may find value in fundamentally strong penny stocks that have the potential to grow significantly over time.
5. Long-Term Investors: Investors with a long-term view can look for promising penny stocks, focusing on those with strong fundamentals and growth potential in emerging sectors.
6. Diversified Investors: Those with established portfolios who want to add a high-risk, high-reward segment can allocate a small portion to penny stocks to enhance potential returns.

Penny stocks can be rewarding but are inherently risky. Hence, it is always worthwhile to conduct thorough research and invest cautiously to align with your financial goals and risk tolerance.

Conclusion

Penny stocks are available for a low price. But these are highly volatile in nature. Hence, it is important to have a well-diversified portfolio to mitigate the risk. Understand your risk appetite and investment goals before investing.

FAQs About Penny Stocks Below Rs. 10

Explore other popular stock collections on Tickertape –

Here’s are some of the popular stock collections across different sectors in India:

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Anjali Chourasiya

I am a finance enthusiast who loves exploring the world of money through my lens. I’ve been dedicated to building systems that work and curating content that helps people learn.

As an insatiable reader and learner, I’ve spent the last two years exploring the world of finance. With my creative mind and curious spirit, I love making complex finance topics easy and fun for everyone to understand. Join me on my journey as we navigate the world of finance together!

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