45% Dividend: This Small Cap Fertilizer Stock Will Consider Share Buyback Today; Check Shareholders' Update

The share price of private-sector fertilizer manufacturer Chambal Fertilisers and Chemicals Ltd will remain in focus on Monday (January 8) as the company's board of directors will consider a share buyback proposal in its board meeting due today.

Shares of Chambal Fertilisers and Chemicals Ltd last closed 3.64% lower at Rs 372.80 per share. At this price, the company has a market capitalisation (full) of Rs 15,516.16 crore. On January 4, 2024, Chambal Fertilisers traded at a new 52 Week High value of 402.00. Before this, the stock traded at a new 52-high week value for three consecutive days on Jan 3, Jan 2, and Jan 1 at Rs 388.20, Rs 386.20, and Rs 385.00 respectively.

Chambal Fertilisers is a small-cap stock operating in the Fertilizers sector. In an exchange filing on Wednesday (Jan 3), the company said; "A meeting of the Board of Directors of Chambal Fertilisers and Chemicals Limited ("Company") is scheduled to be held on Monday, January 8, 2024, to consider a proposal to buyback equity shares of the Company in accordance with the applicable provisions of the Companies Act, 2013 (including the rules framed thereunder) and the Securities and Exchange Board of India (Buy-Back of Securities) Regulations, 2018."

Share Buyback Meaning:

A share buyback or share repurchase, is a corporate action where a company decides to buy back its shares from its shareholders usually at a premium to the current market price. Companies buy back shares for several reasons, like to reduce the number of shares outstanding, thereby increasing the value of remaining shares or to stop other shareholders from taking a controlling stake.

Share buyback is also seen as an alternative tax-efficient way to return money to shareholders. When a company announces a buyback, it indicates that the company is bullish on its current operations.

Chambal Fertilisers stock price performance:

In the last six months, shares of Chambal Fertilisers and Chemicals Ltd have gained 36.56%, and have advanced 36.46% in the last three months. In the last one year, the stock has gained 17.31%, while it is up 55.17% in the last three years. In the last two years, returns from shares of Chambal Fertilisers have fallen 13.05 %.

Chambal Fertilizers Q2 results:

In its Q2 results, the company reported a 39% jump in its consolidated net profit at Rs 380.96 crore. In the July-September period of the 2023-24 fiscal, the company's total income slumped to Rs 5,467.28 crore compared to Rs 8,675.59 crore in the corresponding period of the last year, according to a regulatory filing.

The company also announced an interim dividend of Rs 4.50 (45%) per equity share of Rs 10 each.

Chambal Fertilizers Dividend:

The Board of Directors of the Company at its meeting held on November 3, 2023, declared an interim dividend of Rs. 4.50 (i.e. 45%) per equity share of Rs. 10 each of the Company.

About the company:

Chambal Fertilisers caters to the needs of the farmers in twelve states in the northern, eastern, central, and western regions of India and is the lead fertilizer supplier in the State of Rajasthan. The Company has a vast marketing network comprising 15 regional offices, 2,200 dealers, and 22,000 village-level outlets.

As per the information available on the company website, Chambal Fertilisers and Chemicals Ltd. accounts for nearly 15% of the total Urea produced in the country. For more than two decades company has contributed to the food security of the country with responsibility.

Its three hi-tech nitrogenous fertilizer (urea) plants are located at Gadepan in the Kota district of Rajasthan. The three plants have an installed annual production capacity of about 3.4 million MT of Urea contributing to a major chunk of Urea consumed in leading agri states in India.