Rs 32/Share Dividend, 1:2 Split: Eligibility, Record Date; How Rs 8,000 IT Stock Will Become Cheaper

Persistent Systems, a trusted Digital Engineering and Enterprise Modernization partner for global market leaders across Industries, is trading near Rs 8,000. And this stock will soon become cheaper for its investors. That is because the tech player has declared a 1:2 stock split. If that is not enough, there is a whopping Rs 32 per share interim dividend in store as well.

Before ex-split, Persistent will turn ex-dividend by the end of the current month. The company has also declared its Q3 results for FY24. Its stock price will be in focus during the holiday-shortening trading week from January 23-25.

On Saturday, Persistent share price touched a new 52-week high of Rs 7,959.55 apiece. Its market cap is nearly Rs 61,000 crore. In a year, Persistent stock zoomed by nearly 73%.

Here are the key details of the record date, eligibility criteria and earnings of Persistent.

Persistent Systems Dividend:

Persistent received board approval for an interim dividend of Rs 32 per share having a face value of Rs 10 each for FY24. The company fixed January 30 as the record date, which will also be the ex-dividend date.

To be eligible, shareholders must have shares of Persistent in their demat accounts by the record date. That is because, as per BSE FAQs, all eligible shareholders with their names on the list at the end of
Record Date will be eligible to receive dividends.

The dividend will be paid to the Members within 30 days of its declaration by February 18, 2024.

Persistent Systems Stock Split:

The company's board declared stock sub-division/split for its existing shareholders having their equity shares at the face value of Rs 10 each. The move is done to enhance the liquidity of the company's shares and make it affordable to the investors.

The stock split is in the ratio of 1:2 -- which means that -- 1 existing equity share having a face value of Rs 10 each will be sub-divided into two equity shares having a face value of Rs 5 each on fully paid-up.

On the expected timeframe for carrying stock split, Persistent said, "Approximately within 3 months from the date of approval of the Members of the Company and subject to completion of the necessary formalities."

Hence, the record date for ex-split will be announced in due course.

Persistent shares will become cheaper from their current level once the stock split takes place. This is due to the face value of the shares at times of stock sub-division, which reduces in proportion to the split ratio, however, there is no impact on the company's share capital and reserves. Although the price value of a stock reduces in a stock split, the number of shares held rises in the investors' portfolio of that specific stock.

Persistent Systems Q3 Results:

In Q3FY24, Persistent posted a net profit of Rs 286.13 crore, up by 20.2% YoY and 8.7% QoQ. While revenue from operations stood at Rs 2,498.22 crore, registering a growth of 15.2% YoY and 3.6% QoQ. EBITDA climbed by 10% YoY and 9.1% QoQ to Rs 441.83 crore in the quarter.

Sandeep Kalra, Chief Executive Officer and Executive Director, Persistent said, "We are proud to announce the 15th sequential quarter of growth and a significant milestone of our first-ever quarter of $300M+ in revenue and $500M+ in TCV bookings. We are thankful for the ongoing trust and support of our valued clients and partners, which has led to our sustained
growth."

Kalra added, "We were recognized as the "Most Promising Company" of the Year at the 2023 CNBC-TV18 India Business Leader Awards, acknowledging our sustained momentum. We were also included in three prestigious capital market indices - MSCI India Index, S&P BSE 100 and S&P BSE SENSEX Next 50, reflecting our strong fundamentals, client confidence, and competitive edge in the global technology services market."

The company's order booking for the quarter ended on December 31, 2023, was at $521.4 million in Total Contract Value (TCV) and $392.1 million in Annual Contract Value (ACV) terms.

Persistent Systems Fundamentals:

As per Trendlyne, the consensus recommendation from 31 analysts for Persistent Systems is HOLD. EPS is expected to grow by 18.8% in FY24.

Some of the key fundamentals for Persistent's share price as per Trendlyne are:

- Stock Price rose 83.22% and outperformed its sector by 44.51% in the past year.

-Debt to Equity Ratio of 0.11 is less than 1 and healthy. This implies that its assets are financed mainly through equity.

- Interest Coverage Ratio is 33.58, higher than 1.5. This means that it is able to meet its interest payments comfortably with its earnings (EBIT).

- Price to Earning Ratio is 59.18, lower than its sector PE ratio of 66.11.

- Return on Equity(ROE) for the last financial year was 23.23%, more than 20% in the last financial year, indicating an efficient use of shareholder's capital to generate profit.

- Promoter Share Holding stayed the same in the most recent quarter at 31.06%.

- Promoter Pledges are zero.

Disclaimer: The stock just highlights the stock split and its dividend, and is not a recommendation to buy, sell or hold. We have not done fundamental or technical analysis and have no opinion on the stock mentioned. Neither, the author nor Greynium Information Technologies should be held liable for any losses. Please consult a professional advisor.