Dividend Yield At 3.48%: Miniratna PSU Stock Declares 55% Dividend; Buy?

MSTC Limited is a Mini Ratna Category-I PSU under the administrative authority of the Ministry of Steel, Government of India. One of the top PSUs in the field, it offers e-commerce services to a wide range of industry sectors, including e-auction/e-sale, e-procurement, and the development of specialised software and solutions. The company has announced a 55% dividend as well as its financial results for the quarter that ended on September 30, 2023.

MSTC Dividend

"The Board has also declared an Interim Dividend @ 55% i.e. Rs. 5.50 per equity share of face value of Rs.10/- each for the financial year 2023-24. The interim dividend shall be paid within 30 days from the date of its declaration. As per Regulation 42 of the listing regulations' the Board has also fixed 15th November, 2023 as the "record date" for the purpose of ascertaining the eligibility of shareholders for payment of Interim Dividend. The dividend will be credited to the account of the shareholders or the dividend warrant in respect thereof will be dispatched within 30 days from the date of its declaration," said MSTC in a stock exchange filing.

An equity dividend of 150.00% with a face value of Rs 10 (or Rs 15 per share) has been declared by MSTC for the financial year ended in March 2023. This translates into a 3.48% dividend yield at the current share price of Rs 431. The company has a strong dividend history and has paid out dividends on a regular basis over the previous five years. Since September 16, 2020, MSTC Ltd. has issued nine dividends, according to Trendlyne statistics.

MSTC Results

The firm recorded a 21.44% YoY decline in total income, or Rs. 211.23 crores, for the quarter ended September 30, 2023, as opposed to Rs. 268.90 crores for the same period in 2022. It declared a net profit of Rs 55.33 Cr in Q2FY24, down 13.09% YoY from Rs 63.67 Cr in Q2FY23. For the quarter that ended on September 30, 2023, the firm reported EPS of Rs. 7.86, down from Rs. 9.04 in the year-ago quarter.

The firm recorded a total income of Rs. 211.23 crores for the quarter ended September 30, 2023, up 5.75% quarter on quarter from Rs. 199.75 crores for the quarter ended June 30, 2023. The firm saw a 9.34% QoQ increase in net profit from Rs 50.60 Cr in Q1FY24 to Rs 55.33 Cr in Q2FY24.

MSTC Share Price Target

Deven Mehata-Equity Research Analyst at Choice Broking said "MSTCLTD, currently trading at 443 levels, exhibits a favourable technical outlook. The stock enjoys robust support in the form of a rising trend line, which aligns closely with the 50-Day Exponential Moving Average (EMA) levels, both near the 430 mark. This convergence of support levels bodes well for the stock's stability. Notably, the stock is trading above both the 200-Day EMA and the 50-Day EMA, which underscores its current bullish momentum."

"The Relative Strength Index (RSI), a momentum indicator, is hovering around the 50 mark. This indicates that the stock has a moderate degree of strength without being excessively overbought. It suggests a balanced and sustainable market sentiment. There is a minor resistance level observed at 467 levels. Once the stock manages to breach this resistance, it has the potential to rally higher, targeting all-time levels of 540 and beyond. This could present a promising opportunity for investors," the analyst stated.

"For those who have already taken positions at lower levels, it may be prudent to hold onto their investments, with a strategically placed stop loss at 400. This stop loss level offers a buffer to protect gains while allowing for some price volatility," Deven Mehata recommended.

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.