Five penny stocks worth watching in 2025

Generally, penny stocks have poor liquidity, meaning their trading volumes are low. However, if we focus solely on the price tag and disregard liquidity concerns, there are some low-priced companies with high market capitalizations and normal trading volumes.

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In this article, we highlight five such penny stocks worth monitoring in 2025.

NTPC Green Energy

First on the list is NTPC Green Energy, whose stock currently trades at ₹95 per share, with a market capitalization of ₹800 billion as of 10 March 2025.

Incorporated in April 2022, NTPC Green Energy is India’s largest public-sector renewable energy company, primarily generating power through solar and wind sources. Being a government-backed enterprise, it has long-term power purchase agreements with central and state entities, ensuring revenue stability. The company also provides consultancy and project management services.

In February, NTPC Green was in focus as its shareholder lock-in period ended. NTPC, the parent company, holds an 89% stake in NTPC Green Energy.

As part of its ambitious growth plans, NTPC Green aims to achieve 60 GW of renewable energy capacity by 2032, alongside exploring energy storage and ancillary services, which are set to play a crucial role in the future energy landscape.

For the first nine months of FY25, the company reported an operating income of ₹15.9 billion, compared to ₹14.5 billion in the same period last year. Net profit stood at ₹2.4 billion versus ₹2.6 billion a year ago. Since listing in November 2024, NTPC Green’s stock price has declined 24%.

However, given India’s ambitious renewable energy goals, investors should keep an eye on this stock’s execution capabilities and developments. For more details, check out NTPC Green’s financial factsheet.

Motherson Sumi Wiring

Next is Motherson Sumi Wiring, currently trading at ₹52 per share with a market capitalization of ₹232 billion as of 10 March 2025.

Established in 2022 following the reorganization of Samvardhana Motherson International (SAMIL), the company emerged after the demerger of SAMIL’s automotive wiring harness business for Indian original equipment manufacturers (OEMs). Despite now operating independently, Motherson Sumi Wiring continues to benefit from the solid foundation provided by its partners, Sumitomo Wiring Systems (SWS) and SAMIL.

Through its joint venture with Sumitomo Wiring Systems, a global leader in wiring harness manufacturing, Motherson gains access to cutting-edge technologies and global best practices, ensuring it remains at the forefront of innovation.

Additionally, SAMIL’s deep expertise in the automotive components sector provides crucial resources, industry know-how, and a vast network within the Indian automotive market.

Financially, the company has demonstrated strong growth, with sales increasing at a compound annual growth rate (CAGR) of 28% over the past three years, while net profit has expanded at 17%.

Motherson maintains a sharp focus on absolute profitability, reflected in its robust return ratios, and continues to stand out among its peers due to its strategic alignment with key market trends.

Looking ahead, the company is expanding its manufacturing footprint, adding two new facilities to its existing 26. These new plants will support both internal combustion engine (ICE) and electric vehicle (EV) production, contributing an additional 8–10% to overall capacity once fully optimized.

Despite its strong fundamentals, the stock has declined 20% over the past year. However, with its expansion plans and strong industry positioning, Motherson Sumi Wiring remains a company to watch in the evolving automotive sector.

Infibeam Avenues

The third stock on our list, Infibeam Avenues, trades at ₹18.6 per share with a market capitalization of ₹52 billion as of 10 March 2025.

Founded in 2007 by Vishal Mehta and headquartered in GIFT City, Gandhinagar, Infibeam operates as a payment processor for online merchants.

Its flagship payment system, CCAvenue, supports more than 250 payment options across 27 international currencies, enabling seamless digital transactions. The company also manages platforms such as the Government e-Marketplace, Bharat Bill payment services, and hospitality solutions.

The company’s stock has remained under pressure since the spin-off of its digital marketing arm in 2024. However, Infibeam is focusing on growth through strategic acquisitions, particularly with the recent purchase of Rediff.com. The acquisition provides access to 65 million monthly visitors and strengthens its position in consumer payments. Additionally, the company has received approval from NPCI for a TPAP license under the RediffPay brand, allowing it to offer UPI services.

Financially, Infibeam’s net sales have grown at a compound annual growth rate (CAGR) of 22% over the past five years, while net profit has expanded at 4%. In the December 2024 quarter, net revenue increased by 28% year-on-year, with profit rising 22% during the same period. The company has guided for a revenue growth of 30% and a profit growth of 35% for FY25.

As the fintech sector evolves, Infibeam is positioning itself for long-term expansion, leveraging digital media technology, live events, and AI-driven fraud detection. While the company has faced setbacks, its aggressive acquisition strategy could provide a pathway to recovery. Despite these growth plans, the stock has struggled, plunging 53% over the past year.

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Suzlon Energy

Suzlon Energy currently trades at ₹53 per share, with a market capitalization of ₹727 billion as of 10 March 2025.

The company provides end-to-end wind power solutions, including wind resource assessment, infrastructure and power evacuation, technical planning, and project execution.

Once a frontrunner in the renewable energy sector, Suzlon faced significant challenges, burdened by mounting debt, management instability, and declining demand amid a global economic slowdown. Reports of poor blade quality, low order fulfillment, and strategic missteps only compounded its troubles. However, in a dramatic turnaround, Suzlon has regained its footing, and its stock has followed suit.

With India’s renewable energy targets becoming more ambitious—aiming to expand wind power capacity from 48 GW to 100 GW by 2030—Suzlon has reported record-breaking order books for multiple quarters. This revival has been reflected in its financials. After years of losses up to FY22, the company has returned to profitability for two consecutive years and is on track for strong earnings in FY25.

In the December 2024 quarter, Suzlon reported an all-time high order book of over 5.5 GW, securing orders for the entire upcoming financial year. Revenue surged 90% year-on-year in Q3, while net profit saw a 91% jump to ₹3.9 billion.

The company is now scaling up its manufacturing capacity to over 4.5 GW, with upgraded facilities in Pondicherry and new blade production lines in Madhya Pradesh and Rajasthan.

Read this | India can be a global hub for wind turbines: Suzlon’s Girish Tanti

While challenges persist, particularly in transmission delays and land acquisition, management remains optimistic. Suzlon is also expanding into hybrid projects that integrate wind energy with other renewables and storage solutions, aiming to optimize power generation and ensure reliability.

Investors have taken note of this resurgence, with the stock surging 35% over the past year, signaling renewed confidence in Suzlon’s growth trajectory.

Gateway Distriparks

Gateway Distriparks currently trades at ₹61 per share, with a market capitalization of ₹31 billion as of 10 March 2025.

The company operates as an integrated intermodal logistics provider, offering a comprehensive range of services, including general and bonded warehousing, rail and road transportation, and container handling. With first and last-mile connectivity by road, it ensures seamless multimodal logistics solutions, supported by GPS-enabled tracking and route planning.

Financially, the company has shown steady growth. Over the past five years, its sales and net profit have grown at a compound annual growth rate (CAGR) of 12% and 18%, respectively. In the December 2024 quarter, Gateway Distriparks reported a profit of ₹4.6 billion, a significant jump from ₹650 million in the same period last year.

As India moves toward doubling its container capacity, Gateway Distriparks is well-positioned to capitalize on the rising demand for logistics solutions, particularly in rail and container handling. The company is expanding its footprint by adding new Inland Container Depots (ICDs), though site selection has posed challenges, leading to delays. Plans are also in place to construct two new terminals, though timelines remain uncertain. For FY25, maintenance capital expenditure is expected to be around ₹200 million.

Despite some setbacks, the company remains optimistic about the future, targeting double-digit growth in its rail business by leveraging market trends and operational efficiencies. However, the stock has faced pressure, declining 40% over the past year.

Final thoughts

Penny stocks embody the classic risk-reward tradeoff—offering the potential for massive gains but also posing the highest risk of wealth erosion. While they can deliver significant upside, they require careful scrutiny and disciplined investing.

Success in penny stock investing isn’t about luck; it’s about due diligence and strategic selection. Identifying the right opportunities can enhance your portfolio’s long-term returns, but only if approached with caution. Evaluating a company’s fundamentals, corporate governance, and valuations is essential before making any investment decisions.

Also read | Investing 101: How to identify a fraud company

If you’re keen on discovering promising penny stocks, check out this video I recorded last month, where I highlight some low-priced companies with strong growth potential.

Happy Investing.

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such.

This article is syndicated from Equitymaster.com