Penny stock hits 5% upper circuit after bagging multiple orders worth ₹ 482.37 Cr; Check the details

tradewithakanksha
Sep, Tue, 2023

Penny stock hits 5% upper circuit after bagging multiple orders worth ₹ 482.37 Cr; Check the details

When a penny stock “hits” or experiences a significant price movement, it can mean different things depending on whether it goes up or down in price:

Penny Stock Hits Upper Circuit: If a penny stock hits an upper circuit, it means that the stock’s price has increased by the maximum allowable limit set by the stock exchange for that particular stock on that trading day. This often happens when there is positive news or a sudden surge in buying interest. When a stock hits the upper circuit, trading in that stock may be temporarily halted for a period to allow the market to stabilize.
Penny Stock Hits Lower Circuit: Conversely, if a penny stock hits a lower circuit, it means that the stock’s price has decreased by the maximum allowable limit set by the stock exchange for that stock on that trading day. This typically occurs in response to negative news or a sudden wave of selling pressure. Like with upper circuits, trading in a stock that hits the lower circuit may be temporarily halted.
Penny Stock Volatility: Penny stocks are known for their high volatility, which means that their prices can fluctuate dramatically over short periods. These price movements can be triggered by a variety of factors, including news releases, market sentiment, speculation, and low liquidity. Investors who trade in penny stocks should be aware of this volatility and its associated risks.
Investor Sentiment: The price movement of a penny stock can reflect investor sentiment and the perceived value of the company. Positive developments or favorable news can lead to upward price movements, while negative news or concerns can result in downward price movements.
Speculation: Penny stocks are often subject to speculative trading, where investors buy and sell based on short-term price movements rather than the underlying fundamentals of the company. Speculative trading can lead to rapid and unpredictable price swings.
Risks: Penny stocks are considered risky investments due to their volatility, limited liquidity, and potential for price manipulation. Investors in penny stocks should exercise caution, conduct thorough research, and consider their risk tolerance before trading or investing in these stocks.

It’s important to note that trading or investing in penny stocks can be highly speculative and may not be suitable for all investors. Due diligence, research, and risk management are crucial when dealing with penny stocks. Additionally, understanding the rules and regulations of the stock exchange where the stock is listed is essential, as trading halts, circuit breakers, and other mechanisms can impact trading in these stocks.

RPP Infra Projects Limited is an Indian infrastructure development company that specializes in various construction and infrastructure projects. As of my last knowledge update in September 2021, here is some information about the company:

Company Overview: RPP Infra Projects Limited is based in Chennai, Tamil Nadu, India. It is engaged in the business of infrastructure development, including the construction of highways, bridges, roads, buildings, irrigation projects, and other civil engineering works.
Projects: The company has undertaken a wide range of infrastructure projects across India. These projects may include road construction, flyovers, industrial structures, and more. The specific projects they are involved in may change over time as they bid for and secure new contracts.
Financial Performance: The financial performance of the company can vary from year to year depending on the projects they are currently executing and the economic conditions in the construction industry.
Stock Market: RPP Infra Projects Limited’s stock may be listed on the Indian stock exchanges like the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). The stock’s performance is influenced by various factors, including the company’s financial results, market conditions, and investor sentiment.
Management: The company is typically led by a board of directors and managed by an executive team. The composition of the management team may change over time.

Please note that the information provided is based on my last knowledge update in September 2021. For the most current and detailed information about RPP Infra Projects Limited, including its latest projects, financial performance, and other developments, I recommend checking the latest news articles, the company’s official website, or financial news sources.

Shares of this penny stock hit the 5 percent upper circuit after the company received several orders worth Rs 482.37 crores. In the past six months, the company’s stock has gained more than 80 percent.

With a market capitalization of Rs 268.30 crores, the stocks of RPP Infra Projects Limited started their trading session on Tuesday at its 5 percent upper price band of Rs 71.36 apiece. The same price is also recorded as the company’s fresh 52-week high levels.

Such sharp stock price movements were observed after the company, through a regulatory filing with the BSE, announced that it has bagged several orders worth Rs 482.37 crores.

It comprises four different orders starting with Chennai Petroleum Corporation Limited awarding a project worth Rs 300.44 crores for Road and drain works in Tamil Nadu. Defence Research & Development Organization also provided an order worth Rs 90.18 crores for civil works and other allied services in Bengaluru.

In addition, the company also received an order from Municipal Corporation based in Tamil Nadu for construction of a storm water drain worth Rs 16.88 crores. It also received an order from the Chief Engineer, Tamil Nadu worth Rs 74.87 crores for Twad Board-Improvement.

Digging into the financial performance of the company in the past couple of financial years, the basic business indicators such as the operating revenues and net profits have shown decent improvements.

The operating revenues moved up from Rs 801 crores during FY21-22 to Rs 1,040 crores during FY22-23, and, the net profits took a shift from Rs 5 crores to Rs 28 crores during the same time horizon.

Additionally, the company has seen an upward trend in the profitability metrics with the return on equity (RoE) jumping from 1.59 percent during FY21-22 to 8.38 percent during FY22-23, and, the return on capital employed (RoCE) moving up from 6.81 percent to 13.42 percent.

According to the latest shareholding pattern data available as per the June 2023 quarter, the company’s Promoters hold a 51.29 percent stake, and the Foreign Institutional Investors (FIIs) hold a 0.39 percent stake in the company.

RPP Infra Projects Limited is involved in the business of construction and engineering activities. The company engages in construction activities across multiple infrastructure verticals like buildings, roads, power, water management, etc. It derives a majority of its revenues from domestic operations within India.