A small-cap pharmaceutical company with a market capitalization of ₹ 2,115 crores has announced a very high dividend of ₹ 47.50 per share. This includes a final dividend of ₹ 10 and a special dividend of ₹ 37.50 per share.
The company that we are referring to is Novartis India. It is primarily engaged in the business of pharmaceuticals, eyecare and generic medicines. The company imports various medicines to India from different sources across the globe. Moreover, it is developing gene therapies for families devastated by rare and life-threatening diseases
According to an exchange filing the company’s board had recommended a final dividend of ₹ 10 and a special dividend of ₹ 37.50 for each share of the face value of ₹ 5 each, or 950 percent of the face value. The special dividend has been declared on the occasion of the company’s 75th Anniversary.
The company has been paying dividends on a consistent basis and had a dividend yield of around 1.10 percent. However, the latest dividend announcement takes its dividend yield to 5.53 percent, as its shares were trading at ₹ 859 apiece at 02:00 PM on Wednesday.
Novartis India has a low return on equity of 14.09 percent, but an ideal debt-to-equity ratio of 0.03. Its shares were trading at a price-to-earnings ratio (P/E) of 20.47, which is lower than the industry P/E of 23.97, indicating that the stock might be undervalued as compared to its peers.
The company’s shareholding pattern shows that its promoters hold a 70.68 percent stake in it, followed by retail investors with 28.34 percent, domestic institutions with 0.75 percent and foreign institutions with 0.23 percent.
Written by Simran Bafna
Disclaimer
The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Dailyraven Technologies or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
