Multibagger: Up over 600%, penny stock HLV turned ₹10,000 into ₹73,600 in 4 years; good time to buy?

Penny stock HLV has delivered remarkable multibagger returns over the past four years, surging from ₹3.15 in March 2020 to approximately ₹23.19 at present. This translates to an impressive return of nearly 636 percent.

If an investor had allocated ₹10,000 to this stock back in March 2020, that initial investment would have grown to ₹73,600 by now.

HLV Limited owns and operates The Leela Mumbai hotel with 394 guest rooms. The company was formerly known as Hotel Leelaventure Limited and changed its name to HLV Limited in December 2019. HLV Limited was incorporated in 1981 and is based in Mumbai, India.

Read here: Lloyds Enterprises: Up 2337%, this penny stock turned ₹1 lakh into ₹24 lakh in 4 years

The stock has surged around 170 percent in the last 1 year but lost 14 percent in 2024 YTD, giving negative returns in 2 of the 3 months this year so far.

It has shed 22 percent in March so far, after an over 11 percent decline in February. Meanwhile, it jumped 27 percent in January this year.

Currently trading at ₹23.19, the stock is almost 45 percent away from its 52-week high of ₹41.99, hit on February 7, 2023. Meanwhile, it has soared 190 percent from its 52-week low of ₹8, hit on March 28, 2023.

The significant increase in value reflects a strong wave of market confidence and positive sentiment towards the stock, underscoring a notable achievement for the company amidst the current market conditions.

Read here: Multibagger Alert! SJVN soars 490% in 4 years, jumps from ₹20.75 to 122.4

Earnings

In the December quarter (Q3FY24), the company has posted 209 percent surge in its net profit at ₹9.53 crore as against a net profit of ₹3.08 crore in the year-ago period. Meanwhile, its total income also rose over 20 percent to ₹58.25 crore.

Brokerage view

According to ICICI Direct's analysis, the company is currently observing a surge in net cash flow and cash generated from its operational activities. Additionally, the firm boasts a high Trailing Twelve Months (TTM) EPS (earnings per share) along with robust annual EPS growth, it highlighted.

Meanwhile, its weakness, as per the brokerage, is the stock lost more than 20 percent in 1 month.

Read here: Multibagger! This FMCG penny stock surged 2400% since March 2020

What are penny stocks?

Penny stocks are shares of small companies that typically trade at low prices, often below ₹10 per share, in the Indian markets. These stocks are typically associated with companies that have small market capitalisations. 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.

Read here: Multibagger! This penny stock turned ₹10k to over ₹2 lakh in just 2 years

Investing in penny stocks can be appealing to some investors because of the potential for significant returns if the stock price increases substantially. However, it's essential to recognise that penny stocks also carry significant risks. 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.