Standard Industries is a penny stock with a market capitalization of ₹ 202 crores and a market price of ₹ 30.75 apiece. The company is engaged in the business of property division and trading in textiles and chemicals. Its wholly-owned subsidiaries include Standard Salt Works Ltd and Mafatlal Enterprises Ltd.
The company’s share price has increased by 81.18 percent in the past year and by 60.84 percent in the past five years. Standard Industries has a very high return on equity of 375.92 percent and an ideal debt-to-equity ratio of 0.18.
The penny stock was available at ₹ 17.00 per share a year ago, and it declared an interim dividend of ₹ 1.75 and a final dividend of ₹ 0.75 during FY23, taking the total to ₹ 2.50. If an investor would have invested in the shares one year ago, they would have received a dividend at a yield of 14.70 percent [(₹2.50/17.00)*100] beating the returns of fixed deposits and public provident funds.
According to the company’s shareholding pattern, FIIs hold a massive 38.86 percent stake in the company followed by retail investors with 36.70 percent, promoters with 20.31 percent, domestic institutions with 4.03 percent and mutual funds with 0.10 percent.
Standard Industries is yet to release its results for the quarter and the year ended March 31, 2023. However, when we compare the results FY21 and FY22, we find that its net sales increased from ₹ 11.9 crores in FY21 to ₹ 438.96 crores in FY22, owing to an increase in sales in the March quarter of 2022. Accordingly, its profit increased from ₹ 3.11 crores to ₹ 184.66 crores.
The numbers however remained muted in the following quarters. The company reported sales of merely ₹ 3.7 crores in the December quarter of 2022, but its other income came in at ₹ 31.22 crores. It posted a profit of 22.71 crores in the December quarter.
While Standard Industries has a high dividend yield, it is important to note that it is a penny stock and is therefore a risky investment. Penny stocks are prone to manipulation and pump-and-dump schemes. Investors should thoroughly research these stocks and study their financials before investing in them.
Written by Simran Bafna
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