Penny stock upper circuit buzz: This high ROE stock is a bonus candidate; keep on your watchlist!

IT services and consultancy company. The stock was locked at the upper circuit limit

Indian markets experienced a challenging Monday, with benchmark indices deepening their losses as the day progressed, resulting in a decline of approximately 0.90 per cent. Most sectoral indices concluded in the red, with Nifty PSU Bank leading the downturn with a substantial drop of more than 2.5 per cent.

The broader indices also finished in negative territory, as Nifty Mid-Cap saw a decline of more than one per cent, and Small-Cap registered a 0.62 per cent decrease.

Against this backdrop, amidst the gloomy market conditions, one stock that stood out on D-Street was DRC Systems India Ltd. Established in 2012, DRC Systems India Ltd is an IT services and consultancy company. The stock was locked at the upper circuit limit, experiencing an increase of almost 5 per cent, closing at Rs 47.23 on the BSE. Opening the day at Rs 45, it reached a low of 43.30 on Monday, ultimately settling at the day's highest point.

This surge in the stock's value was attributed to the announcement of a Board of Directors meeting scheduled for Thursday, January 18, 2024. The meeting will consider, approve, and record the Unaudited Financial Results for the quarter and nine months ending on December 31, 2023, along with a proposal for the issuance of bonus Shares, subject to requisite approvals.

DRC Systems India Ltd currently boasts a market cap of Rs 209 crore, displaying a robust Return on Equity (ROE) of 32.6 per cent, with a promoter holding of 22.6 per cent. Notably, the public holds approximately 76.41 per cent of the company's shares, with a prominent holder being Infibeam Avenues Ltd.

In light of these developments and the impending announcement of bonus shares, the stock has garnered attention. Share your thoughts on this penny stock in the comment section.

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