1:10 Stock Split: Buy The Textile Stock Ahead of Trading Ex-Split On 17th May?

With a market valuation of Rs 255 Cr, Vardhman Polytex is a small-cap firm in the textile industry. The stock is in the spotlight as it announced a first-ever stock split, which led to the stock closing 0.93% higher on the BSE on Wednesday at Rs 93.64 per share. The scrip touched a 52-week-high level at Rs 97.44 on (07/05/2024) and a 52-week-low level at Rs 37.05 on (15/05/2023).

Vardhman Polytex Stock Split

"Pursuant to regulation 42 of SEBI (LODR) Regulations, 2015, it is hereby informed that the Board of Directors of the company has fixed "Saturday, 18th May, 2024" as the "Record Date" for the purpose of Sub-division/ Split of equity shares of the company having face value of Rs. 10/- each fully paid-up into 10 equity shares having face value of Re. 1/- each fully paid-up, ranking pari-passu with the existing shares in all respects, pursuant to the approval of shareholders by passing of Special Resolution dated 04th May, 2024 through Postal Ballot," said the company in a regulatory filing.

Vardhman Polytex Financials

Vardhman Acrylics' net profit jumped 34.95% to Rs 5.29 crore in the quarter that ended in March 2024 from Rs 3.92 crore in the quarter that ended in March 2023. In the quarter that ended in March 2024, revenue from operations fell 15.16% to Rs 68.38 crore from Rs 80.60 crore in Q4FY23. Net profit for the entire year dropped by 46.62% to Rs 17.54 crore in the fiscal year that ended in March 2024 from Rs 32.86 crore in the fiscal year that ended in March 2023. Net revenue for the year ended March 2024 dropped 30.28% to Rs 297.48 crore from Rs 426.66 crore in the year prior ended March 2023.

Vardhman Polytex Share Price Target

"Vardhman Polytex Limited is a recognized Indian manufacturer, supplier, and exporter of yarn and garments. This small-cap company recently generated a buzz in the stock market following its 1:10 share split announcement. This news further drew individuals' attention to its finances and overall fundamentals. While the company has offered 114.76% returns in a year, it has not declared any dividend on its 257 shares. Notably, the PE ratio of both the company and the sector it operates in is negative. However, its current PE ratio of -7.22 is still better than the sector ratio of -55, suggesting that the textile company may be losing money slower than the broader sector. While I hold bullish views on this small-cap stock, I recommend limited exposure owing to its susceptibility to become volatile. Those interested may consider buying it in the Rs. 80-85 range for a target of Rs. 94-115. However, they must hold it for 30-120 days to generate gains while at the same time setting their stop loss at Rs. 75," said V.L.A. Ambala, a Research Analyst (SEBI Registered), Co-founder - Stock Market Today (SMT).

Disclaimer

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