5 Microcap Stocks with Reserves Higher than Market Cap to Watch
Finding promising microcap stocks can be a daunting task. However, one useful indicator is when a company’s reserves are higher than its market value. This often suggests that the company is more solid than its stock price might indicate. However, it's important to consider the company's debt levels to assess balance sheet risks. In this article, we will explore five microcap stocks that you should keep an eye on.
Century Enka, a member of the Aditya Birla Group, is one of India's leading manufacturers of nylon tyre cord fabric and nylon filament yarn. Established in 1965, the company operates state-of-the-art facilities in Pune and Bharuch, known for its premium products, innovation, and customer-centric approach in the textile and tyre sectors. With a market capitalization of Rs 964 crore, Century Enka is currently trading at Rs 441 per share. The company has a minimal debt of Rs 36.4 crore and a high interest coverage ratio of 20.6x, indicating lower risk from leverage. Century Enka boasts a substantial reserve base of Rs 1,414 crore, which is more than 1.4 times its market cap.
Oricon Enterprises, a subsidiary of Parijat Enterprises, is engaged in the production and sale of diversified packaging products, including metal packaging, ROPP caps, plastic closures, PET preforms, and aluminium tubes. The company also has a presence in the petrochemical and real estate development sectors. Oricon Enterprises is a significant industrial player with a global presence, exporting its products to over 40 countries. With a market capitalization of Rs 930 crore, the company is currently trading at Rs 59.2 per share. It has a minimal debt of Rs 11.3 crore and a high interest coverage ratio of 24.5x, signaling lower risk from leverage. Oricon Enterprises has a reserve base of Rs 1,238 crore, which is more than 1.3 times its market cap.
Oswal Green Tech Limited is primarily a real estate developer and investor. The company develops real estate assets for sale and makes investments in the equity and debt markets. It also offers intercorporate deposits, making it active in both the property and financial investment sectors. With a market capitalization of Rs 866 crore, Oswal Green Tech is currently trading at Rs 33.7 per share. The company has a minimal debt of Rs 5.11 crore and a high interest coverage ratio of 16x, indicating lower risk from leverage. Oswal Green Tech has a reserve base of Rs 2,011 crore, which is more than 2.3 times its market cap.
Avadh Sugar & Energy Limited, based in Kolkata, was incorporated in 2015. Its main business is the manufacture of sugar and the production of related by-products. The company is a multi-unit enterprise handling three segments of the sugar business: cogeneration power, distillery, and the production of ethanol, molasses, bagasse, and industrial spirits. It also generates power and trades in petroleum products. With a market capitalization of Rs 771 crore, Avadh Sugar & Energy is currently trading at Rs 385 per share. It has a high debt of Rs 594 crore and a low interest coverage ratio of 2.25x, signaling higher risk from leverage. Despite this, the company has a reserve base of Rs 1,040 crore, which is more than 1.3 times its market cap.
Nahar Spinning Mills Limited, established in 1980 and located in Ludhiana, is a diversified textile company. It produces various types of yarns, knitted garments, woollen wear, and woven fabrics, including denim. The company also operates in polyfilms, financial services, sugar, and other industrial sectors. With a market capitalization of Rs 722 crore, Nahar Spinning Mills is currently trading at Rs 200 per share. It has a high debt of Rs 760 crore and a low interest coverage ratio of 1.8x, signaling higher risk from leverage. Nahar Spinning Mills has a reserve base of Rs 1,517 crore, which is more than 2 times its market cap.
These five microcap stocks, with their substantial reserves, offer investors a glimpse into companies with strong financial positions. However, it's crucial to conduct thorough research and consult financial advisors before making any investment decisions.
