1:5 Split, 25% Dividend Record Date On Sept 20; Defence Stock Surges 72% YTD Before Ex-Date; Is It Overvalued?

Defence company, Premier Explosives traded volatile ahead of its ex-dividend date on September 20. On Thursday, Premier Explosives went from surging nearly 2% to hit an intraday high of Rs 555, to erasing its gain and ending in red.

Premier Explosives Share Price:

The stock price ended at Rs 535.60 apiece, down by 1.75% on BSE with a market cap of Rs 2,879.45 crore. The smallcap defence company rose by as much as 1.81% during trading hours to hit an intraday high of Rs 555 apiece, however, gave up gains as broadly investors booked profits in smallcap indexes.

The stock's 52-week high and low is at Rs 909.35 and Rs 195.04 apiece. YTD, the stock has surged by 71.69% on BSE, while in a year, the stock zoomed by 155.34%.

The stock's price-to-equity ratio is high at 105.91x, while the return on equity (ROE) stood at 12.34%.

Are Premier Explosives Shares Overvalued?

As per Alpha Spread data, the intrinsic value of one PREMEXPLN stock under the Base Case scenario is 56.6 INR. Compared to the current market price of 532 INR, Premier Explosives Ltd is Overvalued by 89%.

Premier Explosives Dividend:

The company has informed exchanges that a dividend of Rs. 0.50/- (i.e., 25%) per equity share of Rs. 2/- each for the financial year ending March 31, 2024, will be paid to the shareholders, subject to the approval of shareholders at the forthcoming 44th Annual General Meeting of the company.

The record date to determine eligible shareholders for the dividend is set on September 20, 2024. Also, this will be the ex-dividend date.

The upcoming dividend payout has been revised due to the stock split of 1:5 ratio that Premier Explosives carried earlier in 2024, which led to a decline in face value from Rs 10 each to Rs 2 each. Earlier, the dividend payout was Rs 2.50 per share at a face value of Rs 10 each.

However, with face value now at Rs 2 each, the dividend payout is Rs 0.50 per share.

Premier Explosives Stock Split:

The stock first time split first on June 21, 2024, in a ratio of 1:5. This meant that 1 equity share of Premier Explosives at a face value of Rs 10 each was split into five smaller shares with a face value of Rs 2 each.

On the ex-split date aka June 21, the stock ended at Rs 885 apiece on NSE. While on the ex-split date, the company had also touched a new 52-week high of Rs 908.80 apiece.

About Premier Explosives:

Premier Explosives Limited is a Rs.2600 million company established in 1980, Since inception it has been a research and innovation oriented company by manufacturing explosives and detonators with totally indigenous technology in 1980's and 1990's. In 2013 PEL started commercial-scale manufacture of detonators with Nickel Hydrazine Nitrate (NHN)as primary charge emerging as the world first to do so.

Currently, PEL has the widest range of products and technologies in the manufacture of Explosives & Accessories. These include Emulsion and Slurry explosives, LD cartridge explosives, Bulk Explosives, Small-dia non-permitted explosives, Permitted explosives, Cast Boosters, Pillow-packs for secondary blasting; Detonating Fuse of various core-loads, Plain detonators, Instantaneous Electric Detonators, Electric Delay Detonators, Permitted Detonators, Cord Relays and Amardet NoN Electirc Shock-tube Detonators.