High Return Penny Stocks (2025)

What are High Return Penny Stocks?

High return penny stocks are shares that trade below ₹50 and have delivered strong returns in the past 3 to 12 months. Their prices can move sharply due to earnings changes, market news, or other business developments.

Overview of High Return Penny Stocks

1. Motherson Sumi Wiring India Ltd: The company designs and manufactures wiring harnesses and related components for the automotive sector.
2. Jaiprakash Power Ventures Ltd: This company operates thermal and hydroelectric power plants across India. It focuses on generating and supplying electricity while leveraging diversified power assets to contribute to the country’s growing energy requirements.
3. Ujjivan Small Finance Bank Ltd: Ujjivan provides banking and financial services, primarily targeting underserved and unbanked segments. 
4. South Indian Bank Ltd: It is a private sector bank that focuses on digital banking, lending solutions, and expanding its reach, particularly across southern India, while maintaining a strong presence nationwide.
5. RattanIndia Power Ltd: The company engages in power generation through its thermal plants. It focuses on supplying electricity efficiently to support India’s growing power demand and operates large-scale facilities in strategic locations.

How to Invest in High Return Penny Stocks?

Here is how one can invest in the best high return penny stocks:

1. Open a demat/trading/stockbroker account. You can open a demat account with smallcase!
2. Conduct thorough research into the best high return penny stocks that are of interest to you. Investors can use tools like the Tickertape Stock Screener to do this. The screener offers 200+ built-in filters to choose from, and investors can choose the parameters to research.
3. Place a ‘Buy’ Order on penny stock with high return of your choosing.

Benefits of Investing in High Return Penny Stocks

• Low Entry Price: These stocks trade below ₹50, allowing investors to take exposure to a larger number of shares with relatively low capital outlay.
• Undervalued Opportunities: Certain penny stocks may be undervalued due to various factors. Over time, as the company grows and gets better recognition, the stock may see a price correction that reflects its actual value.
• Scope for Re-Rating: If a company strengthens its business or improves earnings, its stock may get re-rated by investors, leading to a potential change in how it’s priced.
• Higher Trading Volumes: Penny stocks with high return may attract attention due to sharp price movements or company-specific developments. This visibility can lead to higher trading volumes, which indicate increased market participation.

Risks of Investing in High Return Penny Stocks

Factors to Consider Before Investing in High Return Penny Stocks

• Nature of Price Movement: Stocks can rise due to better earnings, sector news, or just speculation. Knowing what triggered the recent gains helps understand the move.
• Financial Health and Profitability: Revenue growth, net profit, and debt levels show how the well company is doing financially. These basics help assess whether the stock’s performance aligns with business fundamentals.
• Sustainability of Returns: Some penny stocks with high returns may have benefited from short-term triggers. Understanding the context behind the price spike can help investors make informed decisions.
• Corporate Announcements and Disclosures: Announcements like expansions, restructuring, or new deals give a clearer view of the company’s direction and future plans.
• Shareholding Pattern: A stable promoter holding, fewer pledged shares, or recent FII/DII entry often reflects confidence from those closest to the business.