Penny stock rises 10% after 5x jump in Q2 profit; do you own this debt-free share?

Penny stock Vakrangee climbed 10 per cent in Monday's trade after the company said its September quarter profit after tax climbed 412.5 per cent year-on-year (YoY) or 5 times to Rs 3.03 crore on 6.8 per cent rise in sales at Rs 70.58 crore. Ebitda grew 44.7 per cent YoY, with margins expanding to 12.4 per cent from 9.2 per cent in Q2 FY25.

The company said it expects profitability to continue, with a focus on delivering strong quarter-on-quarter growth. Following this, the stock rose 9.93 per cent to hit a high of Rs 9.63 on BSE. The stock gained 2 per cent each in the preceding two sessions. Quarterly Gross Transaction Value (GTV) crossed Rs 12,928.70 crore in Q2, with total number of transactions crossing 3.1 crore, the company said in a presentation.

Going forward, said Vakrangee, it is strategically focusing on non-cash based banking offerings such as account opening, loan product, insurance services, fixed deposits, mutual funds & NPA recovery to drive deeper financial inclusion and value-added offering.

Vakrangee said, along with its subsidiary companies, it is debt-free and maintains a strong balance sheet. "This strong financial position enables us to confidently support our expansion plans and pursue sustained long-term growth," it said in a presentation.

Vakrangee said its strategic focus stays on high-margin business for better profitability & phasing out low-margin business to optimise operations. Long-term aim is to enhance margin expansion and sustainable growth, it said.

With the fast pace of digital payment penetration, Cash transactions such as ATM & Banking transactions are expected to witness slow down. Therefore, there would be profitability & viability challenges for standalone business models such as only White Label ATMs, only Banking (AEPS) provider, only Money Transfer providers which are dependent on cash transactions.

Vakrangee said it is future ready with a clear focus on building long term sustainable & profitable business model. The company said it has no dependency on single line of product or services such as ATM or banking services. It has wide portfolio of product & services such as online shopping, total healthcare services, bill payments, online travel services, mobile recharges, CIBIL score services, pan card services, online opening of demat & trading account opening services, among others.

In a presentation, Vakrangee said it is launching an online digital platform to enable seamless services for the consumer at the comfort of their homes. Through this, company has evolved into the unique O2O (Online to Offline) platform, whereby there is assistance available through the Physical Kendra network along with Digital Online Services.

The company has currently launched an upgraded Beta Trial Version of “BharatEasy” Mobile Super App” based business platform. The Mobile super app platform would be offering various consumer products and services under one umbrella.

"Consumers would use it every day because our app would offer a seamless, multi-service, integrated, contextualised and efficient experience," Vakrangee said.