Low PE & high ROE multibagger penny stock under Rs 5 hit 20 per cent upper circuit; This micro-cap NBFC company has total assets of Rs 200 crore!

The shares of the company have a PE of 13x whereas the industry PE is 22x and an ROE of 27 per cent with multibagger returns of 465 per cent in just 3 years.

On Wednesday, shares of Advik Capital Ltd 20 per cent upper circuit to Rs 2.77 per share from its previous closing of Rs 2.31. The stock’s 52-week high is Rs 5.01 and its 52-week low is Rs 1.90. The shares of the company saw a spurt in volume by more than 3 times on BSE.

With a focus on long-term expansion and portfolio diversification, Advik Capital Limited is strategically working towards achieving the status of a Systematically Important Non-Banking Financial Company (SIB-NBFC) by 2025. Currently, the company possesses a net worth of Rs 100 crore and total assets amounting to Rs 200 crore. Advik Capital is approaching this significant milestone by actively executing a comprehensive expansion strategy. This strategy encompasses the enlargement of its business offerings, exploration of new-age sectors, and strategic evaluation of existing lines to enhance overall performance.

To support this ambitious growth, Advik Capital is attracting industry veterans with expertise in risk, operations, governance, and technology. The company is also channelling additional resources to strengthen its operations. Attaining the SIB-NBFC status, which requires a minimum asset size of Rs 500 crore, will not only fortify Advik Capital's position in the financial market but will also enable the provision of more sophisticated products to its customers.

Recognition as a Systematically Important NBFC by the Reserve Bank of India underscores Advik Capital's crucial role in maintaining overall financial stability, granting it access to participate in specialized market segments. In essence, Advik Capital is strategically manoeuvring to expand its influence and offerings, aiming to become a pivotal player in the Indian financial landscape.

Earlier, Advik Capital, an NBFC, launched a Rs 250 crore AIF to invest in sunrise sectors like healthcare and turnaround-stressed assets. This expansion into new-age finance, alongside its recent ARC acquisition, positions Advik Capital to capitalize on India's growing AIF and ARC markets, strengthening its position in the evolving financial landscape.

The company has a market cap of Rs 118.60 crore and has delivered good profit growth of 70 per cent CAGR over the last 3 years. The company reported positive numbers in its Quarterly Results (Q2FY24) and annual results (FY23). According to the shareholding pattern, promoters of the company own 21.80 per cent, FIIs own 0.39 per cent and the Public owns a 77.81 per cent stake in the company as of October 2023.

The shares of the company have a PE of 13x whereas the industry PE is 22x and an ROE of 27 per cent with multibagger returns of 465 per cent in just 3 years.

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