1:5 Stock Split, 1:1 Bonus Shares: IT Stock Sets Record Date; Buy?

A small-cap company in the IT industry is Colab Cloud Platforms Ltd. IT products are the focus of Colab Cloud Platforms Ltd, formerly known as JSG Leasing Limited, which was founded in 1989. The company handles computer hardware, software, and share and securities trading business. The announcement of the record date for the 1:5 stock split and the 1:1 bonus shares by the firm has caused market observers to shift their attention towards the stock. With a 205% rise in only one year and a 170.49% YTD gain so far in 2024, Colab Cloud Platforms has shown multibagger gains recently.

Colab Cloud Platforms Stock Split Record Date

"In continuation to our previous announcement regarding Record Date for Sub-division/Split of the Equity Shares of the Company, we hereby inform to the exchange that the Record date has been shifted to Tuesday, 19th March 2024 for sub-division/Split of the equity shares of the Company from 1 (One) equity share having face value of Rs. 10/- (Rupees Ten only) each into 5 (Five) equity shares having face value of Rs. 02/- (Rupees Two only) each. Accordingly, Record Date for Split/Sub-division and Bonus Issue of equity shares of the Company is Tuesday, 19th March 2024," said Colab Cloud Platforms in a stock exchange filing on 06th March 2024.

Colab Cloud Platforms Record Date For Bonus Shares

"We hereby inform to the exchange that the Board of Directors have considered and fixed Tuesday, 19th March 2024 as a Record Date for the following purpose: Issue of 5,10,00,000 (Five Crore Ten Lakh) equity bonus shares in a ratio of 1:1 i.e. 01 (One) equity share for every 01 (One) existing equity share of the Company having face value of Rs. 2/- (Rupees Two only) fully paid-up (considering Split/Sub-division of equity shares of the Company)." Colab Cloud Platforms stated in a regulatory filing on Wednesday.

Colab Cloud Platforms Financials

The company reported a net sales of Rs 1.12 crore in the December 2023 quarter up 82.89% from Rs. 0.61 crore in the December 2022 quarter. Its net profit stood at Rs. 0.88 crore in Q3FY24 up 109.34% from Rs. 0.42 crore in Q3FY23. EBITDA reached Rs. 0.88 crore in the reporting quarter up 109.52% from Rs. 0.42 crore in the same quarter of the previous fiscal.

Colab Cloud Platforms Share Price Target

"Colab Cloud Platforms, formerly known as JSG Leasing Limited, is engaged in computer hardware and software processing. The company was listed on the stock exchange in 2020 at Rs.15.28, currently in 2024, it is trading at Rs.178.85, emerging as a multi-bagger. The company has piqued the interest of investors again after it announced a stock split in a 1:5 ratio. The news has triggered confusion among traders and investors who are now wondering whether to make a bull run or book profits. However, before making any decision they should note that the small-cap is available at a huge valuation boasting a PE ratio of 101 compared to the sector PE of -125. Individuals seeking growth and willing to take calculated risks can hold it for 2 years while setting a target of Rs.210-450. For now, the stock volume is low, so I would advise them to set a stop loss of Rs.125-135. On the other hand, those willing to start a fresh long position should maintain an exposure limit and chase Rs.150-180 as their buying range, with a target of Rs.210-450 and a stop loss of Rs.125-135," said V.L.A. Ambala, a Research Analyst (SEBI Registered), Co-founder - Stock Market Today (SMT).

Colab Cloud Platform is bullish but also very overbought with next resistance at 208 on the Daily charts. Investors should book profits at current levels as Daily close below support of 167 could lead to a target of 145 in the near term, said AR Ramachandran from Tips2trades.

Disclaimer

The recommendations made above are by market analysts and are not advised by either the author, nor Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.