It could be a difficult task to find decent microcap stocks. However, one indicator that can be helpful is when a company’s reserves are more than its market value. In most cases, it implies that the company is a more solid one than the stock price is showing. In this article, we will look at five microcaps which you should definitely keep under your radar.
Tamil Nadu Newsprint and Papers Limited (TNPL) is one of the major paper and packaging board manufacturers in India, which also produces electricity to meet its power requirements through turbines and windmills. Besides this, the firm is extending the process of value addition by turning the waste materials into cement, which is then sold by the company, making the whole process not only energy-efficient but also environment-friendly.
Tamil Nadu Newsprint & Papers is currently trading at Rs 144 per share. It has delivered an ROE and ROCE of (-0.14 percent) per cent and 5.54 percent, respectively. The company has a huge reserve base of Rs 2,000 crore against its market capitalisation of Rs 995 crore, which is more than 2x of its market cap.
Zuari Industries Limited is a diversified conglomerate with its presence in the sectors of engineering services, furniture, real estate, sugar, power, ethanol, and financial services. The company provides engineering and project management solutions, manufactures furniture, develops real estate, produces sugar and ethanol, powers the industry using sugar by-products, and offers several financial and management services.
Zuari Industries is currently trading at Rs 322 per share. It has delivered an ROE and ROCE of (-1.69 percent) per cent and 2.82 per cent, respectively. The company has a huge reserve base of Rs 4,644 crore against its market capitalisation of Rs 960 crore, which is almost 5x of its market cap.
Oswal Greentech Limited is basically a company that develops and invests in real estate. The company develops real estate assets for sale and also makes investments in the equity and debt markets. Besides that, it also offers intercorporate deposits, hence it is active in both the property and the financial investment sectors.
Oswal Green Tech is currently trading at Rs 34.6 per share. It has delivered an ROE and ROCE of 0.34 percent per cent and 0.43 per cent, respectively. The company has a huge reserve base of Rs 2,256 crore against its market capitalisation of Rs 887 crore, which is over 2.5x of its market cap.
Kuantum Papers Limited is engaged in manufacturing and selling diverse agro- and wood-based paper products in the domestic and global markets. These are essentially the different papers in which the company’s brand names are known: copier paper, writing and printing paper, and creamwove. Besides, the company offers various kinds of paper that are the products for books, notebooks, stationery, calendars, and directories etc. Further, the company is shipping the products to foreign markets as well.
Kuantum Papers is currently trading at Rs 97.6 per share. It has delivered an ROE and ROCE of 10.1 percent per cent and 11.1 per cent, respectively. The company has a reserve base of Rs 1,196 crore against its market capitalisation of Rs 844 crore, which is over 1.4x of its market cap.
Dhampur Sugar Mills Limited is a sugar mill company that produces sugar and sells a number of by-products such as ethanol, industrial alcohol, chemicals, and country liquor. Further, the company is producing electricity using bagasse and molasses, and agricultural products are sold through the diversified operations of the company.
Dhampur Sugar Mills is currently trading at Rs 126 per share. It has delivered an ROE and ROCE of 4.44 percent per cent and 5.86 per cent, respectively. The company has a reserve base of Rs 1,061 crore against its market capitalisation of Rs 813 crore, which is over 1.3x of its market cap.
Written by Satyajeet Mukherjee
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