The biggest concern here is that the company’s market capitalization is INR 900 crore, while its debt has surged to INR 1372 crore. This means the company has borrowed more than its own capital, which is a serious red flag. If the company’s operations or cash flow do not remain strong, it might struggle to repay its debt.
However, the biggest red flag is that 81.7% of the company’s shares are pledged! 😨 This is a highly negative sign because it means that the promoters have used their holdings as collateral for loans. If the company’s financials weaken or the stock price drops, lenders may sell these pledged shares, further pressuring the stock.
Borrowings are Continuously Increasing! 📈
In 2017, the company had zero borrowings, but by 2024, it has surged to INR 1510 crore. This suggests that the company is operating with high leverage, which could be risky. Moreover, its reserves are not strong enough to handle a financial crisis or clear debts in the future.
Borrowings
Promoters Have a Strong Holding, But No Institutional Interest!
Promoters hold 62.66% of the shares as of Dec 2024, which is a positive sign, as it shows their continued involvement in the company.
However, there is zero FII or DII holding, meaning institutional investors are not interested in this stock, which is a negative signal.
A large portion of the stock is held by the public, and the stock float appears to be low.
Shareholding Pattern
Biggest Risk: Public Sentiment 😬
If the company fails to show revenue growth or does not meet public expectations, retail investors might start selling their shares in panic. This could create heavy selling pressure and further drag down the stock price.
Final Verdict: Gensol’s high debt and pledged shares are major red flags. Unless the company significantly improves its financial performance or attracts strong institutional investors, the stock will remain in a high-risk zone. Investors should carefully evaluate the risks before making any decisions!
Here are some top tax-saving investment options in India that can help you save taxes while also potentially growing your wealth:
1. Public Provident Fund (PPF)
Tax Benefits: Investment in PPF qualifies for deduction under Section 80C of the Income Tax Act. The interest earned and the maturity amount are also tax-free.
Features: Long-term investment with a 15-year lock-in period, offering a safe return.
2. Employees’ Provident Fund (EPF)
Tax Benefits: Contributions to EPF are eligible for deduction under Section 80C. The interest and maturity amount are tax-free if the employee completes five years of service.
Features: Retirement-focused savings scheme with contributions made by both employee and employer.
3. National Pension System (NPS)
Tax Benefits: Contributions are eligible for tax deductions under Section 80C and an additional deduction under Section 80CCD(1B) up to ₹50,000.
Features: Market-linked pension scheme with flexibility in investment choices.
4. Equity-Linked Savings Scheme (ELSS)
Tax Benefits: Investments in ELSS funds qualify for deduction under Section 80C. However, gains above ₹1 lakh are taxed at 10% as long-term capital gains.
Features: Lock-in period of 3 years, with the potential for higher returns due to equity exposure.
5. Sukanya Samriddhi Yojana (SSY)
Tax Benefits: Contributions are eligible for tax deduction under Section 80C. Interest earned and maturity amount are tax-free.
Features: A savings scheme specifically for the girl child, with a high-interest rate and maturity after 21 years.
6. Tax-Saving Fixed Deposits
Tax Benefits: Investments in tax-saving FDs with a 5-year lock-in period are eligible for deduction under Section 80C.
Features: Guaranteed returns, though interest earned is taxable.
7. Unit Linked Insurance Plan (ULIP)
Tax Benefits: Premiums paid are eligible for deduction under Section 80C. Maturity proceeds are tax-free under certain conditions.
Features: Combines life insurance with investment, offering both protection and potential market-linked returns.
8. National Savings Certificate (NSC)
Tax Benefits: Investments qualify for deduction under Section 80C. Interest is taxable but reinvested, and it qualifies for a tax deduction.
Features: A safe investment option with a fixed return and 5-year tenure.
9. Health Insurance Premiums (Section 80D)
Tax Benefits: Premiums paid for health insurance policies for self, spouse, children, and parents qualify for tax deductions under Section 80D.
Features: Provides financial protection against medical emergencies while also offering tax benefits.
10. Senior Citizens Savings Scheme (SCSS)
Tax Benefits: Investments are eligible for deduction under Section 80C. Interest earned is taxable but offers a higher interest rate.
Features: A government-backed savings scheme designed for senior citizens with a 5-year lock-in period.
These investment options cater to different financial goals and risk appetites, allowing investors to save taxes while also securing their financial future.
“Anyone can get lucky for a short period of time. But consistent outperformance over long periods is probably evidence of skill.” – Bill Miller
You don’t have to beat the market to be successful over time. There is risk involved, as there is in all investments, but the important thing is to balance the amount of risk you’re willing to take with the return you’re aiming for.
Different Kinds Of Stocks – First it’s important to understand what is a stock. When investors talk about stocks, they usually mean common stocks. A share of common stock represents a share of ownership in the company that issues it. The price of the stock goes up & down, depending on how the company performs & how investors think the company will perform in the future. The stock may or may not pay dividends,which usually come from profits. If profits fall, dividend payments may be cut or eliminated.
There are lots of reasons to own stocks & there are several different categories of stocks to fit your goals.
Growth Stocks – Growth stocks are companies that increase their revenue and earnings at a faster rate than the average business in their industry or the market as a whole. Growth investing, however, involves more than picking stocks that are going up. Often a growth company has developed an innovative product or service that is gaining share in existing markets, entering new markets, or even creating entirely new industries. Businesses that can grow faster than average for long periods tend to be rewarded by the market, delivering handsome returns to shareholders in the process. And, the faster they grow, the bigger the returns can be.
Unlike value stocks, high-growth stocks tend to be more expensive than the average stock in terms of metrics like price-to-earnings, price-to-sales, and price-to-free-cash-flow ratios. Investors buy them because of their record of earning growth & the expectation that they will continue generating capital gains over the long term.
Blue Chip Stock – Blue chip stocks are shares of very large and well-recognised companies with a long history of sound financial performance. These stocks are known to have capabilities to endure tough market conditions and give high returns in good market conditions. Blue chip stocks generally cost high, as they have good reputation and are often market leaders in their respective industries.
Income Stock – Income Stock is a form of security which provides regular dividends to the investors. This dividend steadily grows over time to adjust for dividend to inflation. Such stocks are mostly issued by companies with stable cash flow and well-established financial infrastructure. These companies have large market capitalization and usually operate at a mature stage in their growth graph.
Value Stock– Value Stocks earn the name when they are considered underpriced according to several measures of value described later in this booklet. A stock with an unusually low price in relation to the company’s earnings may be dubbed a value stock if it exhibits other signs of good health. Risk here can vary greatly.
A Smart Way To Buy Stocks – Choosing good or right stocks there is no secret to it. Information is the key. Having information or Knowledge about companies is more important than other factors. Information is even more important than timing. Good stocks tend to stay good, so you can take the time to investigate before invest.
There is Some Factors We Analysis Before Investing In Stocks:
Earning Per Share – Earnings per share or EPS is an important financial measure, which indicates the profitability of a company. It is calculated by dividing the company’s net income with its total number of outstanding shares. It is a tool that market participants use frequently to gauge the profitability of a company before buying its shares.
Price Earning Ratio – The Price Earnings Ratio (P/E Ratio) is the relationship between a company’s stock price and earnings per share (EPS). It is a popular ratio that gives investors a better sense of the value of the company. The P/E ratio shows the expectations of the market and is the price you must pay per unit of current earnings (or future earnings, as the case may be). Look for companies with P/E ratios lower than other companies in the same industry.
Dividend Yield –Dividend yield is the financial ratio that measures the quantum of cash dividends paid out to shareholders relative to the market value per share. It is computed by dividing the dividend per share by the market price per share and multiplying the result by 100. A company with a high dividend yield pays a substantial share of its profits in the form of dividends. Dividend yield of a company is always compared with the average of the industry to which the company belongs. For Long Term Investment. Look for a dividend to generate income to reinvest in the company. The target: a pattern of rising dividends supported by rising earnings.
Return On Equity – Look for a return on equity that is consistently high, compared with the return for other companies in the same industry, if that shows a strong pattern of growth. A steady return on equity of more than 15% may be a sign of a company that knows how to manage itself well.
More Clues To Value In a Stocks – The company’s industry is on the rise. Even though you can make money in a declining industry, you’re more likely to succeed in big & growing markets than in small or shrinking ones. Exciting young industries offer potential, but the staying power of any particular company is hard to predict.
The company is a leader in its industry. Being number one or two in its primary industry gives a company several advantages. As an industry leader it can influence pricing, rather than merely react to what others do. It has a bigger presence in the market. When the company introduces new products, those products stand a better chance of being accepted. Also the company can afford the research necessary to create those new products.
Reinvesting Your Dividends – Dividend reinvestment is using the cash dividend paid by a company or fund to buy more shares of that same investment. Any investor can use this strategy since most brokerage accounts have automatic dividend reinvestment programs that automate the purchase of new shares in that same stock, exchange-traded fund (ETF), or mutual fund. Similarly, many dividend-paying companies offer investors the opportunity to participate in a dividend reinvestment plan (also known as a DRIP). Meanwhile, even if a broker or company doesn’t provide an automatic dividend reinvestment plan, an investor can manually reinvest their payments. You can pocket the cash or reinvest the dividends to buy more shares of the company or fund. With dividend reinvestment, you are buying more shares with the dividend you’re paid, rather than pocketing the cash. Reinvesting can help you build wealth, but it may not be the right choice for every investor.
When To Sell Stocks –
Sometimes, there’s absolutely nothing wrong with a company or its stock. There are simply better investment opportunities elsewhere that would yield higher returns. Investors can then consider selling a less attractive stock (even at a loss!) if they believe they can get better returns by investing elsewhere.
Investors should seriously consider selling a stock if it so happens that their rationale for buying it was flawed, if the valuation was too optimistic, or if there are any additional risks associated with it.
If an investment’s price has plunged in a way that it causes investors to lose sleep over it, it is a signal for them to move their money elsewhere.
One tends to invest for the long term in India. However, one should consider selling if the stock price escalates to a point where it no longer reflects the underlying value of the business. Additionally, one should re-examine his/her evaluation of a company’s fundamentals when the stock suffers an unusual decline in its price. When bubble bursts, stock prices will not rise to the previous level until the fundamentals improve again. There will be no immediate rebound, as the drop is a correction of the previous mispricing.
