Surging high! Penny stock Pulsar International soars 13,200% in 5 years

Penny stock Pulsar International has turned multibagger, delivering exponential returns to its investors in the last five years. The stock has soared a massive 13,200 percent, rising from ₹0.10 in July 2019 to ₹13.3 currently. Meanwhile, over the past three years, the stock has surged by an impressive 8,212 percent, climbing from ₹0.16 in July 2021 to its current levels.

This remarkable growth highlights the company’s robust performance and market confidence, making it a standout in the stock market. Early investors who recognized its potential have seen their investments multiply significantly, showcasing the stock's impressive turnaround and upward trajectory. Such extraordinary gains reflect its past success and underscore its potential as a high-return investment opportunity for the future.

In recent times as well, Pulsar has continued to demonstrate strong performance, rising over 43 percent over the past year and over 67 percent year-to-date in 2024. The stock has delivered positive returns in five out of the seven months so far this year. In July, it has declined over 5 percent, snapping after 4 straight months of gains since March. In this period, it jumped 23 percent in June, 3.6 percent in May, 35 percent in April, and 0.3 percent in March. However, the stock shed 11 percent in February but advanced 15 percent in January 2024.

Moreover, the stock is almost 8 percent away from its record high of ₹14.4, hit last month, June 2024. Meanwhile, it has shown strong resilience by surging over 119 percent from its 52-week low of ₹6.08, recorded in November 2023.

About the firm

Pulsar International Limited engages in buying, selling, and dealing in industrial and consumer goods, and materials and commodities in India. It deals in chemicals, pesticides and petrochemicals, and pharmaceutical products. The company was incorporated in 1990 and is based in Ahmedabad, India.

Earnings

In the March quarter (Q4FY24), Pulsar reported a standalone net profit of ₹76 lakh, reversing a loss of ₹15.5 lakh in the same period last year. Revenue for the quarter stood at ₹899 lakh, a decline of over 54 percent from ₹1,978 lakh a year earlier, while total expenses fell to ₹822 lakh from the previous year's figure ₹1,728 lakh.

For the fiscal year 2023-24, the company achieved a consolidated net profit of ₹180 lakh, a substantial improvement from a net profit of ₹13.19 lakh in FY23. Revenue for FY24 surged to ₹1,978 lakh, a multifold increase compared to ₹36.88 lakh in the previous financial year.

Brokerage views

Domestic brokerage house ICICI Direct highlights the key strengths of Pulsar International, noting its strong momentum with the stock price remaining above short, medium, and long-term moving averages. The company has demonstrated robust annual EPS growth and has been effectively utilizing its capital to generate profit, as evidenced by an improving Return on Capital Employed (RoCE) over the past two years.

However, the firm's weaknesses, as per ICICI Direct, are: 

• Promoter holding decreased by more than -2 percent QoQ.
• Declining Net Cash Flow: The company is not able to generate net cash.

Investing in penny stocks offers the potential for substantial returns due to their lower price points, but it also involves significant risks. These stocks often face liquidity issues, resulting in lower trading volumes compared to larger companies. Additionally, they may be subject to less stringent financial reporting requirements and oversight, increasing the risk of market manipulation and fraudulent activities.

These factors contribute to heightened volatility in penny stocks, elevating the risk for investors. To navigate these challenges effectively, thorough research and robust risk management strategies are essential. By taking these precautions, investors can better handle the uncertainties associated with penny stocks and safeguard against potential losses.

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