1:10 Stock Split: Record Date On 31st May; Buy Before Or After Share Split?

Since its founding in 1970, the Kukkuwada, Karnataka-based Davangere Sugar Company Limited has ventured into Sustainable Power and Ethanol Solutions, adding to its range of products beyond Sugar. Considering that it will trade ex-split on Friday, May 31, the small-cap FMCG stock is probably going to be in the spotlight today.

Davangere Sugar Company Stock Split Record Date

The company has fixed Friday, May 31, 2024 as the record date for the purpose of sub-division of 1 equity share of nominal value of Rs. 10/- each fully paid up into 10 equity shares of Re. 1/- each fully paid up or in a 1:10 ratio.

Davangere Sugar Company Financials

Net sales for the March 2024 quarter were reported by the firm as Rs 63.57 crore, a drop of 27.87% from the March 2023 quarter's Rs 88.13 crore. The company's net profit for the fourth quarter of FY24 was Rs. 4.55 crore, down 46.89% from Rs. 8.57 crore in Q4FY23. EBITDA reached Rs. 12.54 crore in the quarter under review down 26.84% from Rs. 17.14 crore in the same quarter of FY23.

Davangere Sugar Company Share Price Target

"Davangere Sugar Company Ltd is an India-based refined sugar manufacturing company that has recently been in the news after it announced a change in the Face Value of its stock from 10 to 1, i.e., a stock split of 10:1, effective May 31, 2024. The recently listed small-cap stock is 5.69X more volatile than the Nifty 50, so it demands a cautious approach. In the last 5 years, the company with a market cap of Rs. 858 crores has witnessed a yearly revenue growth of 27.9%, surpassing the industry's average growth of 9.46%.

The small-cap stock has offered a return of 67.97% in a year and has a PE ratio of 70.08, higher than the sector PE of -70.38, highlighting the stock's outperformance. Notably, the company has recorded a growth in its profitability over the last five years but has not offered any dividends. Regardless, those interested can consider buying and averaging this stock at Rs. 93-100 range. They may hold it for 1-7 months to achieve a targeted price of Rs.110-170 while setting a stop loss at Rs. 88. Meanwhile, those invested in its IPO and/or in the secondary market may continue to hold it at the same level and allow the stock to add value to their portfolio," said V.L.A. Ambala, a Research Analyst (SEBI Registered), Co-founder - Stock Market Today (SMT).

Disclaimer

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