Heavy buying in this high ROE & high ROCE penny stock below Rs 65 on May 08; Spurt in volume by more than 2 times on BSE – watch out!

The shares of the company have an ROE of 28.4 per cent and an ROCE of 24 per cent.

Today, the shares of HMA Agro Industries Ltd gained 7.32 per cent to Rs 61.55 from its previous closing of Rs 57.35. The stock’s 52-week high of Rs 84 and its 52-week low of Rs 48.51. The shares of the company saw a spurt in volume by more than 2 times on BSE.

HMA Agro Industries Ltd, founded in 2008, is a leading Indian food trade company specializing in handling and exporting a variety of food and agricultural products. They are one of the biggest exporters of frozen buffalo meat in India, accounting for over 10 per cent of the nation's total exports in this category. Their offerings include frozen fresh buffalo meat, prepared and frozen natural products, vegetables, and cereals. The company's brands "Black Gold", "Kamil", and "HMA" are shipped to over 40 countries around the world. HMA Agro Industries has a strong focus on meat processing, operating four integrated plants in Aligarh, Mohali, Agra, and Parbhani, with plans to expand by setting up a fifth facility in Haryana.

CRISIL Ratings reaffirmed HMA Agro Industries Ltd.'s (HMA) long-term bank facility rating at ‘CRISIL A-/Stable’ despite an increase in the facility amount from Rs 400 crore to Rs 500 crore. This reflects HMA group's strong market position in meat processing, healthy finances with low debt, and expectation of continued growth. HMA's established customer relationships and expansion into new products and regions are expected to drive revenue growth to Rs 4,400 - 4,600 crore in fiscal 2024.

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The group's comfortable financial position is evident in low gearing ratios and efficient working capital management, with sufficient internal accruals to cover debt obligations. The rating outlook is stable but could improve if the group achieves higher profitability or weakens if profitability falls below expectations or large debt-funded investments are made.

According to the Quarterly Results, the net sales increased by 62.89 per cent (YoY) and 4.29 per cent (QoQ) to Rs 1,251.72 crore in Q3FY24 while net profit increased by 75.43 per cent (YoY) and 772.27 per cent (QoQ) to Rs 49.16 crore in Q3FY24. In its nine-month results, the net sales increased by 49.14 per cent to Rs 3347.66 crore and net profit increased by 21.53 per cent to Rs 124.26 crore in 9MFY24 compared to 9MFY23.

The company has a market cap of over Rs 3,000 crore. The shares of the company have an ROE of 28.4 per cent and an ROCE of 24 per cent. Investors should keep an eye on this Small-Cap stock.

Disclaimer: The article is for informational purposes only and not investment advice.