2 ASX Penny Stocks with Institutional Interest

Penny stocks are often dismissed as speculative and risky — companies that burn cash faster than they make it. But every once in a while, a few of them stand out by attracting the attention of institutional investors — those professional fund managers and strategic players who usually avoid small, illiquid names. When institutions start buying, it often signals that there’s more to the story than meets the eye.

Two such ASX-listed penny stocks — Micro-X Ltd (ASX: MX1) and Bhagwan Marine Ltd (ASX: BWN) — have been making quiet but meaningful progress, not just in their operations but also in gaining confidence from large investors. Despite operating in very different industries, both are showing encouraging signs of growth and financial strength that could make them long-term winners.

Penny stock 1: Micro-X Ltd (ASX: MX1)

The Company at a Glance

Headquartered in South Australia, Micro-X Ltd is a pioneering medical technology company specializing in compact X-ray and imaging systems. What makes Micro-X stand out is its use of carbon nanotube (CNT) technology — a game-changing advancement that allows the company to produce smaller, lighter, and more energy-efficient X-ray devices compared to traditional systems.

The company isn’t limiting itself to hospitals either. Its innovations extend into defence, security, and airport screening — sectors that demand portable and high-performance imaging. This diversification helps Micro-X balance its revenue streams across both commercial and government markets.

Financial Highlights (FY2025)

1. Revenue: ~$13.1 million, showing steady growth from previous years.
2. Cash and cash equivalents: Around $3.24 million, giving it room to fund near-term R&D and operations.
3. R&D investment: Continued focus on developing next-generation imaging products.

Though Micro-X remains in the early stages of commercial scaling, its revenue growth and diversification indicate progress toward sustainable operations.

Institutional and Strategic Interest

Unlike many penny stocks that rely on retail investors, Micro-X has attracted interest from institutional investors and strategic defence partners. Such involvement typically signals confidence in the company’s long-term vision and technology roadmap.

These investors recognize Micro-X’s potential to disrupt the multi-billion-dollar imaging industry, particularly with projects like its Miniaturised Baggage Scanner, which could redefine airport screening by replacing bulky machines with compact, mobile systems.

In addition, the company’s ongoing collaborations with U.S. defence contractors and global security agencies strengthen its credibility on the world stage.

Growth Catalysts

1. Nano Mobile X-ray System rollout: The company’s portable medical imaging product is gaining traction in international markets, particularly in field hospitals and defence applications.
2. Airport and border security partnerships: Continued progress in commercializing its miniaturized scanners.
3. Global defence collaboration: Expanding exposure to U.S. and European defence procurement opportunities.

Risks to Consider

Micro-X is still loss-making, with cash burn tied to its R&D and product rollout phases. Any delay in commercialization, or the need for additional funding, could slow momentum. However, institutional backing provides a vote of confidence that many early-stage tech firms lack.

Bottom Line on Micro-X

Micro-X offers exposure to a highly innovative niche — the intersection of MedTech and DefenceTech. While still speculative, its growing base of strategic and institutional investors adds a layer of credibility rarely seen among penny stocks. If the company continues to execute on its contracts and partnerships, Micro-X could evolve from a small-cap curiosity into a serious contender in global imaging markets.

Penny Stock 2: Bhagwan Marine Ltd (ASX: BWN)

Company Overview

While Micro-X operates in high-tech labs, Bhagwan Marine Ltd rules the seas. The Western Australia-based company provides marine services for the offshore energy, defence, environmental, and infrastructure industries.

Bhagwan operates one of the largest specialized vessel fleets in Australia, supporting projects that range from port logistics and subsea construction to marine transport and defence support.

What makes Bhagwan Marine particularly interesting is that, despite being classified as a penny stock, it’s profitable, with consistent revenue growth and solid operational performance — a rare feat for a company of its size.

Financial Highlights (FY2025)

1. Revenue: About $283 million, up from $268.85 million in FY2024 — reflecting healthy growth.
2. Net Profit After Tax: Approximately $12.5 million, showing sustainable profitability.

These numbers illustrate that Bhagwan is not your typical “penny stock” in distress. Instead, it’s an established player trading at a low valuation relative to its strong fundamentals.

Institutional and Insider Backing

Bhagwan Marine’s strength lies not only in its numbers but also in who’s backing it. Institutional investors and high-profile private shareholders have shown increasing confidence in the company’s trajectory.

This institutional presence provides a form of stability and external validation — suggesting that the market may be underpricing Bhagwan’s true potential.

Key Growth Drivers

1. Offshore wind and renewable energy projects: The global shift toward green energy is creating new marine infrastructure opportunities. Bhagwan is well-positioned to capture this demand.
2. Multi-year government and port contracts: These recurring revenue streams enhance visibility and reduce volatility.
3. Fleet modernization program: The company continues to invest in upgrading vessels, improving fuel efficiency, and cutting costs.

Risks to Watch

Bhagwan’s performance is still tied to project cycles and macro conditions in energy and construction. Fuel price volatility and potential delays in large contracts could affect short-term margins. However, strong contract visibility and profitability offer a cushion against these risks.

Bottom Line on Bhagwan Marine

Bhagwan Marine stands out as a steady and cash-generating small-cap. It’s a fundamentally sound business with proven execution capabilities, backed by institutional interest and management alignment. For investors seeking exposure to infrastructure and energy without taking on speculative risk, Bhagwan offers a compelling story.

Final Take

Micro-X Ltd offers innovation and global growth potential. It’s a high-risk, high-reward play in the MedTech and DefenceTech sectors, with institutional backing lending credibility to its ambitious roadmap.

Bhagwan Marine Ltd, on the other hand, provides stability — a profitable small-cap with clear revenue visibility and growing participation in the renewable energy marine sector.
Its growing fibre footprint, ownership of network assets, and exclusive wholesale deals give it control and scalability that smaller ISPs can’t match.

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