A stock split is a corporate action whereby a company increases the number of its outstanding shares by dividing existing shares into multiple new shares. This action does not affect the company’s total market capitalization; instead, it results in a proportional adjustment of the share price.
Listed below are two microcap companies in which the board of directors are set to consider stock split:
Exxaro Tiles Ltd
With a market capitalization of Rs. 449 crores, the shares of the ceramic product manufacturing company started Wednesday’s trading session on a higher note at Rs. 98.55 compared to its previous close of Rs. 95.88.
During the trading session, the shares hit a high of Rs. 105.70, gaining around 7 percent and are currently trading at Rs. 100 apiece.
Such a bullish movement in the share price was observed after the company in an exchange filing announced that the meeting of the Board of Directors is scheduled to be held on 14th October 2024, to consider and approve the sub-division or split of equity shares.
Looking at the company’s financial statements, the revenue decreased by around 25 percent from Rs. 79.77 crores during the March quarter to Rs. 59.89 crores in the June quarter. In contrast, net profits shifted from a net profit of Rs. 1.20 crores to a net loss of Rs. 4.24 crores during the same period.
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In terms of key financial metrics, the company reported a return on equity of 0.81 percent and a return on capital employed of 5.65 percent for the period spanning FY23-24. Additionally, the net profit margin stood at 0.74 percent during the same timeframe.
Exxaro Tiles Ltd is a manufacturer and exporter of high-quality vitrified tiles, including Earthstone full-colour body tiles, Prima double charge tiles, and surface glazed vitrified tiles, primarily used for flooring solutions in residential and commercial spaces.
Sudarshan Pharma Industries Ltd
With a market capitalization of Rs. 1,009 crores, the shares of the pharmaceutical company started Wednesday’s trading session on a higher note at Rs. 417.30 compared to its previous close of Rs. 404.15. During the trading session, the shares clocked 5 percent at Rs. 424.35 apiece.
Such a bullish movement in the share price was observed after the company in an exchange filing announced that the meeting of the Board of Directors is scheduled to be held on September 30, 2024, to consider and approve the sub-division or split of equity shares.
Looking at the company’s financial performance, the revenue decreased marginally from Rs. 231.79 crores during H1FY24 to Rs. 231.74 in H2FY24. On the other hand, the net profits increased by 40 percent from Rs. 5 crores to Rs. 7 crores during the same timeframe.
In terms of key financial metrics, the company reported a return on equity of 10.25 percent and a return on capital employed of 13.50 percent for the period spanning FY23-24. Additionally, the net profit margin stood at 2.47 percent during the same timeframe.
Incorporated in 2008, Sudarshan Pharma Industries Ltd specializes in the manufacturing and supply of speciality chemicals, active pharmaceutical ingredients (APIs), and generic pharmaceuticals. The company engages in contract manufacturing and outsourcing, catering to both domestic and international markets.
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Written By Vaibhav Patil
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