10:5 Stock Split: Record On Friday, May 10, 2024; Buy The Stock To Be Eligible?

As of Friday's closing session, Sonam Ltd.'s market capitalization, a small-cap company, was Rs 170 Cr. Sonam Clock Ltd. was established in 2001 and engages in the production and distribution of horological products, clocks, clock movements, and other things. The Sonam stock closed the day on Friday at Rs 84.55, up 1.87%, as the record date for the stock split draws closer.

Sonam Stock Split

"Pursuant to Regulation 42 of Securities and Exchange Board of lndia (Listing obligation and Disclosure Requirements) Regulation, 2015, it is hereby informed that, the company has fixed the "Record date" on Friday, May 10, 2024 for the purpose of Sub-Division of every 1 (One) Equity Shares of the Nominal/Face Value of Rs.10 - (Rupees Ten Only) each into 2 (Two) Equity Shares of the Nominal tace Value of Rs. 5 (Rupees Five Only) each," said Sonam in a regulatory filing.

"The Board of Directors discussed, considered and approved the sub division/split of the equity shares of the company such as that 1 (one) equity shares having nominal/face value of Rs. 10 (ten) each be subdivided into 2 (two) equity shares having face value of Rs. 5 (Five) each subject to approval of shareholders of the company through Postal Ballot process by electronic means only (remote e-voting) and/or any other regulatory authority, if any," said Sonam in a regulatory filing on 14.02.2024.

The rationale behind the stock split is to improve the liquidity of the company's share and to make it more affordable for small investors and retail investors as also to broaden the small investors base, said the company in a stock exchange filing.

Sonam Financials

The company reported a net income of Rs 23.56 Cr in the quarter ended December 2023 compared to Rs 22.24 Cr in the quarter ended December 2022. Its net expenses stood at Rs 20.22 Cr in Q3FY24 which was Rs 19.81 Cr in Q3FY23. The company's EBIT stood at Rs 3.34 Cr in Q3FY24 which was Rs 2.44 Cr in the same quarter of FY23. Sonam said its net profit reached Rs 1.89 Cr in Q3FY24 which was Rs 1.29 Cr in Q3FY23. The company is yet to declare its financial results for the quarter and year ended 31st March 2024.

Sonam Share Price Target

"Sonam Limited Ltd, previously known as Sonam Clock Limited is an Indian company that is engaged in the manufacturing and sale of horological items, clocks, and related items. The small-cap stock with just 166 units has delivered 63.06% in a year but has not declared any recent dividend, despite the sector dividend yield being around 0.46%. Notably, the company stock has a PE ratio of 37.20 against the sector PE of 57, highlighting the fact that it is undervalued in the current market. However, the market view suggests consolidation and potential range breakout for this stock. So, individuals who wish to park their money into this volatile stock may consider buying in parts to limit their exposure. They may enter the buying range of Rs. 80-85, targeting the price range of Rs. 88-115. While they may hold it for a period ranging from 25 to 190 days to generate gains, they should consider setting their stop loss at Rs. 77," said V.L.A. Ambala, a Research Analyst (SEBI Registered), Co-founder - Stock Market Today (SMT).

Disclaimer

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