1:1 Bonus Shares: Small Cap Stock In Focus After PAT Jumps 185% In Q3; Buy?

Choice International Ltd.'s shares began trading on the BSE on Tuesday at Rs 540.20 a share and went on to gain 4.41% to reach a new 52-week high of Rs 564.65. The spike in the stock price occurred after the company released its Q3 earnings along with 1:1 bonus shares for eligible shareholders.

Choice International Bonus Shares

The Board of Directors "Proposed Bonus Issue of Equity Shares in the ratio of 1:1 i.e., 1 Equity Shares of Rs 10/- each for every 1 Equity Share of Rs 10/- each held by the shareholders of the Company as on the Record Date (to be determined by the Board and will be intimated to the exchange), subject to the approval of members of the Company," said the company in a stock exchange filing.

The Board of Directors approved "Increase in the Authorized Share Capital of the Company from Rs 108,00,00,000/- (Rupees One Hundred Eight Crores only), divided into 10,80,00,000 (Ten Crores Eighty Lakhs) Equity Shares of Rs 10/- (Rupees ten only) each to Rs 201,00,00,000/- (Rupees Two Hundred and One Crores only), divided into 20,10,00,000 (Twenty Crores Ten Lakhs) Equity Shares of Rs 10/- (Rupees Ten only) each, pursuant to approval of Bonus Issue and consequential alteration to the Capital Clause of the Memorandum of Association," said Choice International in a regulatory filing.

Choice International Financials

Choice International said that from Rs. 96 crores in Q3FY23 to Rs. 205 crores in Q3FY24, its sales climbed by 115% year on year. In contrast, net profit climbed from Rs. 14 crores in Q3FY23 to Rs. 40 crores in Q3FY24, a year-on-year rise of 185 per cent. On a sequential basis, Choice International Ltd.'s net profit climbed by 33% sequentially from Rs. 30 crores in Q2FY24 to Rs. 40 crores in Q3FY24, while the company's sales improved by 8% on a quarter-on-quarter basis from Rs. 191 crores in Q2FY24 to Rs. 207 crores in Q3 FY24.

Choice International Share Price Target

Choice International is bearish and also very overbought on the Daily charts with strong resistance at 562. Investors should book profits at current levels as Daily close below support of 525 could lead to a target of 434 in the near term, said AR Ramachandran from Tips2trades.

Disclaimer

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