Penny stock surges past 8-Month high—Here's what investors need to know now!

In the past week, the stock returned 11.93 per cent; over the past month, it delivered 10.91 per cent; over the past 3 months, 33.33 per cent; over the past 6 months, 31.89 per cent; and YTD, it has returned 22 per cent.

KBC Global Ltd, an Indian real estate and construction firm, announced the successful handover of 12 units in October 2024. This includes 3 units at Hari Krishna Phase IV, 5 units at Hari Kunj Mayflower, and 4 units at Hari Sanskruti Phase II, all located in Nashik, Maharashtra.

Patanjali Food and Herbal Park, Falcone Peak Fund (CEIC) Ltd among other investors to invest upto Rs. 99.50 crore through convertible preferential warrants issue in KBC Global Ltd (Previously known as Karda Construction Ltd). 

Today, this penny stock broke its 8-month high of Rs 2.37, closing at Rs 2.44 on the upper circuit. The stock has been consistently rising over the last 2 months, delivering approximately 30 per cent returns in this period alone.

1 month candlestick chart – KBC Global

What about the financials?
Looking at the financials, in Q1FY25, the company reported a revenue of Rs 9 crore, down from Rs 10 crore a year ago, reflecting a decline of 3.91 per cent. This revenue is still below the all-time high quarterly revenue of Rs 62 crore reported in March 2023.

Currently, the company is running at a loss, with losses increasing by Rs 2 crore YoY to reach Rs 15 crore in Q1FY25.

What about the shareholding pattern?
The company has seen consistent promoter exits since 2018, where promoter holding stood at around 65 per cent. Currently, promoter holding is down to a mere 1.2 per cent—typically seen as a negative indicator. The shift in shareholding was not towards DIIs or FIIs but towards the public, which now holds over 98 per cent of the company.

What about the returns?
In the past week, the stock returned 11.93 per cent; over the past month, it delivered 10.91 per cent; over the past 3 months, 33.33 per cent; over the past 6 months, 31.89 per cent; and YTD, it has returned 22 per cent.

What should you do?
Although recent returns might tempt you with quick profits, here are some points to consider. KBC Global recently raised Rs 99.5 crore by issuing 45.23 crore warrants at Rs 2.20 each to non-promoter investors. Each warrant can be converted into one equity share in the future, which will further dilute the shares, potentially lowering the EPS.

Generally, new highs supported by above-average volume are preferable, but that’s not the case here, as daily volumes are below average. So, as an investor or trader, exercise caution with this stock before investing.

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