₹10,000 to ₹2.25 lakh in a year! This penny stock gave over 2100% returns in 2022

Shares of coal supplier Hemang Resources have given extraordinary returns to its investors in 2022 even though the year saw massive volatility and a number of headwinds.

The Russia-Ukraine war, rising inflation, high-interest rate, global growth concerns as well as fears regarding recession kept markets on their toes during 2022.

However, penny stock Hemang Resources managed to withstand the pressure and gave massive returns, soaring over 2,100 percent during the year.

The stock surged from ₹3 in December last year to around ₹70 currently, rallying as much as 2,158 percent year-to-date (YTD).

This implies that an investment of ₹10,000 in this penny stock in December last year would have turned into ₹2.25 lakh this year.

The rise in its stock price came on the back of a significant rise in its revenue over the past few quarters and reduced debt.

In the September quarter, the company's net profit surged 791 percent to ₹3.12 crore versus ₹35 lakh in the year-ago period. The company also cut its debt to ₹3.39 crore in September from ₹21.59 crore in March 2021.

In the 12 months of 2022 (considering December so far), the stock gave positive returns in nine and was in the red in three months. It gave multibagger returns in March and April, up 177 percent and 149 percent, respectively.

It surged 90 percent in January, followed by a 61 percent rise in February. However, it fell in May, down 38 percent, July, down 24 percent and November, down 21 percent.

In December so far, the stock has added 27 percent.

Hemang Resources Limited engages in the coal trading business in India. It operates through two segments, coal trading and infrastructure. The company sells imported and indigenous coal. It also trades in land; and provides stevedoring and logistic services. 

The company was formerly known as Bhatia Industries and Infrastructure Limited and changed its name to Hemang Resources Limited in March 2015.

Despite the stellar return, it is important to note that penny stocks are high-risk stocks and not suitable for investors with a risk-averse approach. Only high-risk investors should invest in such stocks and in small weightage. It is advisable to consult a financial advisor before making any changes to the portfolio.

Challenges associated with penny stocks emanate from the fact that these are very small companies with negligible analyst coverage, very limited information on the public domain and often inaccessible insights from the management. 

Unless there is a really strong reason, investing in penny stocks is not generally recommended to serious, long-term investors.

Disclaimer: This story is for educational purposes only. Please speak to an investment advisor before making any investment decisions.