Penny stock turns multibagger: One Point One Solutions zooms 4,328% in 4 years

One Point One Solutions has emerged as a standout performer, transitioning from a penny stock to a significant success story, delivering impressive returns for investors. This journey highlights the potential of penny stocks to create substantial value, albeit with associated risks.

Over the last four years, One Point One's stock price has skyrocketed by an astonishing 4,328 percent, rising from ₹1.75 in August 2020 to ₹77.5 currently. This incredible growth showcases the stock's consistent value appreciation, establishing it as a lucrative opportunity in the penny stock segment.

In August 2021, the stock traded at ₹5.08, and since then, it has surged by 1,425.5 percent, reflecting the company's ability to generate significant returns over the long term.

Even in the short term, One Point One has continued to impress. Over the past year, the stock has gained 161 percent, with a 53 percent increase in 2024 year-to-date, despite experiencing losses in three out of eight months.

August was a strong month for the stock, with an over 7 percent surge, building on a 16.7 percent gain in July and 10.4 percent in June. Despite shedding over 2.4 percent in May, the stock rose 4.7 percent in April. Before that as well, it corrected, down 13 percent in March, following a 3 percent drop in February. Earlier in the year, January saw a significant rally of over 24 percent.

In intra-day deals today, August 27, 2024, the mutlibagger stock reached an all-time high of ₹77.5, marking a 178 percent rise from its 52-week low of ₹27.85 in September 2023. This performance underscores One Point One's ability to deliver substantial returns and maintain investor confidence despite market fluctuations.

About the Firm

One Point One Solutions Limited, based in Navi Mumbai, specializes in customer life cycle management, business process management, and technology services in India. The company offers customer care, debt management, sales, lead generation, back-office support, and social media management. It also provides business solutions like workflow management, speech analytics, and IT infrastructure services. Serving sectors like banking, telecom, insurance, and e-commerce, One Point One Solutions supports clients with services including KYC, fraud verification, and technical help desk operations. The company was founded in 2008.

Earnings

In the June quarter (Q1FY25), One Point One Solutions reported a net profit of ₹22.37 crore, up multifold from ₹4.3 crore in the same period last year. Meanwhile, the company posted a total revenue of ₹166 crore for the quarter under review, surging over 312 percent as against ₹40.23 crore in the year-ago period.

Brokerage Views

ICICI Direct highlights key strengths of One Point One Solutions, noting that the stock meets the majority of the CANSLIM investment criteria. Among its strengths, the company demonstrates strong momentum, with its stock price trading above short, medium, and long-term moving averages. Additionally, One Point One Solutions boasts high trailing twelve-month (TTM) EPS growth, further solidifying its investment appeal.

However, the brokerage also notes several weaknesses:

- Promoters increased pledged shares QoQ

- Promoter holding decreased by more than -2 percent QoQ

- Declining Net Cash Flow: The company has not been able to generate net cash

Investing in penny stocks like One Point One can be appealing due to the potential for high returns with a modest initial investment. However, this segment carries significant risks.

To navigate the volatile world of penny stocks, it's essential for investors to conduct thorough research and implement robust risk management strategies. Key steps include understanding the company's fundamentals, assessing its market position, and examining its financial health. By maintaining a disciplined investment approach and setting realistic expectations, investors can manage potential losses while still seizing opportunities, all while protecting their investments from excessive risk.

Disclaimer: This story is for educational purposes only. Please speak to an investment advisor before making any investment decisions.