1:10 Stock Split: 1 Rs 1,800 Energy Stock Sub-Divided Into Ten Shares; Turns Rs 1 Lakh To Rs 15.2 Lakh Corpus

One energy stock which traded a little over Rs 1,800 per share by January 24, has been sub-divided into ten shares, getting cheaper to even below Rs 200 per share on Thursday. This will be a multibagger smallcap, operating in the gas and petroleum sector, Dolphin Offshore Enterprises (India). The stock was split into a ratio of 1:10 on January 25.

On January 24, the stock price stood at Rs 1,826.85 apiece on BSE and at Rs 186.70 on NSE. After adjusting to the stock split on Janaury 25, Dolphin Offshore is now priced at Rs 182.69 apiece on BSE and Rs 183.06 on NSE.

The company turned ex-split on January 25.

The stock split ratio of 1:10 meant that 1 Dolphin Share having a face value of Rs 10 each has been subdivided into ten equity shares of Dolphin having a face value of Re 1 each.

In general terms, listed companies declare a stock split of already owned shares into much smaller shares. This is done to improve liquidity by breaking the shares into smaller sizes. The face value of the shares 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, it the number of shares held rises in the investors' portfolio of that specific stock.

Dolphin is a leading provider of underwater services to the Indian oil and gas industry. Over the years, we have developed a diversified portfolio for undertaking turnkey projects involving sub-sea and marine services and as an EPC contractor.

Despite the stock split, Dolphins shares have given multi-fold returns to its investors. From its 52-week low of Rs 12.02 apiece, Dolphin shares are up by 1,419.88%.

This means that if an investor had bought Rs 1 lakh worth of shares of Dolphin at its 52-week low price, their investment value by now has risen to a whopping Rs 15,19,880 -- a return of Rs 14,19,880 in less than 1 year.

In Q2 of FY24, the company earned a net profit of Rs 3.53 crore versus Rs 13.16 lakh in Q1FY24. While its revenue climbed to Rs 2.05 crore as against Rs 69 lakh in Q2 of FY23.

The company is yet to declare its Q3 results for FY24.

Apart from the stock split, Dolphin Offshore has carried out other corporate actions such as bonus issues and dividends earlier. As per Trendlyne data, the company has given 2 bonuses since Jan. 11, 2007. The last Bonus that Dolphin Offshore announced was in the ratio 2:5 with an ex-date of June 29, 2009. Further, the company has delivered up to 14 dividends since August 2001.

Some of the fundamentals to note for Dolphin Offshore's share price as per Trendlyne are:

- Annual Net Profit rose 352.81% in the last year to Rs 36.11 Crores. Its sector's average net profit growth for the last fiscal year was -22%.

- Price to Earning Ratio is 1.33, lower than its sector PE ratio of 21.06.

- Return on Equity(ROE) for the last financial year was 20.36%, more than 20% in the last financial year, indicating an efficient use of shareholder's capital to generate profit.

- Interest Coverage Ratio is -1.55, less than one. This means that it is unable to pay interest with its earnings (EBIT).

- Stock Price rose 1,282.63% and outperformed its sector by 1,252.76% in the past year.

- Debt to Equity Ratio of 0 is less than 1 and healthy. This implies that its assets are financed mainly through equity.

- Promoter Share Holding decreased by 19.99% in the most recent quarter to 74.99%.

- Promoter Pledges are zero.

Disclaimer: The write-up just highlights the stock split 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.