10:1 Stock Split: Financial Penny Stock Below Rs 1 With Low PE, Outperforms Giants Suzlon Energy, IRFC In 1-Yr

Monotype India, a penny stock below Rs 1, has outperformed giants like Suzlon Energy and Indian Railway Finance Corporation (IRFC) who have risen to fame since last year with their multi-bagging performance. The robust gains of Suzlon and IRFC led the two companies to enter the large basket where the market valuation of companies is above the Rs 1 lakh crore mark. However, in percentage terms, this penny stock has outperformed both the large caps with its 1-year growth on BSE.

On BSE, after market hours of August 18, Monotype shares stood at Rs 0.96 apiece with a market cap of Rs 67.50 crore. During the trading week from August 12-16, the stock skyrocketed by over 17% on the exchange.

Monotype's year-to-date performance is healthy with 28% gains. While its price-to-equity ratio is low at 7.28x. However, its return on equity is negative at -65.22%.

The stock's 52-week high and low are at Rs 1.12 apiece and Rs 0.20 apiece respectively.

Notably, Monotype's 1-year performance is breathtaking by 336.36%, which is higher compared to Suzlon's 12-month gains of 303.89% and IRFC's performance of 278.49% upside.

With that Monotype has outperformed both Suzlon and IRFC by 32.5% and 57.9% respectively.

Currently, Suzlon shares are at Rs 79.93 apiece with a market cap of Rs 1,08,980.05 crore. While IRFC shares are at Rs 178.80 crore with market value of Rs 2,33,664.89 crore.

However, despite the higher 1-year growth, Monotype's fundamentals are volatile compared to renowned Suzlon and IRFC.

In June 2024 quarter, Monotype's financial results were strong in terms of revenue from operations which rose sharply to Rs 2.68 crore compared to revenue of Rs 2.43 crore in Q4FY24 and Rs 1.20 lakh in Q1FY24. However, its bottom-line is a mixed tone with PAT at Rs 2.05 crore in Q1FY24 broadly flat as against PAT of Rs 2.05 crore in Q4FY24, but sharply down from Rs 5.91 crore in Q1FY24.

Among positive fundamentals for the penny stock as per Trendlyne data are -- Annual Revenue rose 88,206.25%, in the last year to ₹10.6 Cr. Its sector's average revenue growth for the last fiscal year was 27.24%. While Annual Net Profit rose 17.97% in the last year to ₹9.27 Cr. Its sector's average net profit growth for the last fiscal year was 27.65%.

Also, the data highlighted that Monotype's stock price rose 357.14% and outperformed its sector by 306.73% in the past year. While its Debt to Equity Ratio of -1.14 is less than 1 and healthy, which implies that its assets are financed mainly through equity. Additionally, the Price to price-to-earning ratio is 12.49, lower than its sector PE ratio of 19.85.

However, among drawbacks for the stock, as per the data are -- Quarterly Net profit fell 65.26% YoY to ₹2.06 Cr. Its sector's average net profit growth YoY for the quarter was 20.08%. And, Return on Equity(ROE) for the last financial year was -65.19%, less than 10%, indicating an inefficient use of shareholder's capital to generate profit.

In case of corporate actions, Monotype has not carried bonus shares as of now. While it has delivered nil dividend. But the company has sub-divided its equity shares in the ratio of 1:10. The face value of Monotype has split from Rs 10 each to Re 1 each in March 2015.

Monotype is engaged in trading in shares, financial services and Investment activities to strengthen its existing platforms and build new ones.