1:10 Stock Split, 2:1 Bonus Issue; FMCG Stock Below Rs 10, Turns Rs 50,000 To Rs 2 Lakh Corpus

Sarveshwar Foods, an FMCG stock, trading below Rs 10 apiece, has witnessed a huge upside this week. On February 5, the penny stock touched the 10% upper circuit, which was also at its all-time high. Sarveshwar shares are below less than Rs 10 due to adjustments of the 1:10 stock split and 2:1 bonus issue in the second half of 2023. Nevermind, the stock is a multibagger with growth of over 319% in 5 years which turms investment value of Rs 15,000 to Rs 2 lakh corpus, better than FDs.

On BSE, the company's stock stood at Rs 8.89 apiece, which is its 10% upper circuit and new 52-week high on February 6. Its market cap is at Rs 870.17 crore.

In a month, Sarveshwar's share has zoomed by 48% on BSE, while year-to-date, the stock rallied 51.3%. But in 5-years, the stock has skyrocketed by 319.43%.

If an investor had pumped in Rs 50,000 investment in share prices of Sarveshwar five years ago, then their investment has now risen to Rs 2,09,715, recording a return of Rs 1,59,715 as of now.

Last year, in September, Sarveshwar shares turned ex-split in the ratio of 1:10 -- which means -- that its share price has been split into ten new shares. It also turned ex-bonus in the ratio of 2:1 -- which means that the company allocated 2 new bonus shares on 1 existing share.

Sarveshwar Foods certified by USFDA, is engaged in the business of manufacturing, trading, processing, and marketing of branded and un-branded basmati and non-basmati rice in the domestic and international markets.

Last week, Sarveshwar said, it is s strengthening its procurement channel further by setting up 2 more SFL Chaupals (Procurement Facilitation Centre) for the procurement of Walnuts, Rajma, Apple, Black Morels (Gucchi), Kala Jeera and other authentic Himalayan Delights directly from Farmers in Kulgam and Doda.

With these new locations, now Sarveshwar Food is operating 12 SFL Chaupals at various locations across the Jammu and Kashmir Region, 7 in Jammu and 5 in Kashmir. All these SFL Chaupals are managed by trained local farmers who help the local agricultural community access the information in their local language.

To sell its products, SFL has adopted 3-way strategies, first through conventional channels, another to have its own retail outlets, and tapping young and tech-savvy generations' growing tendency to buy products online through www.nimbarkfoods.com.

Also, SFL is the first private sector NSE and BSE listed food company in Jammu & Kashmir.

Fundamentals of stock price analysis as per Trendlyne data are:

- Stock Price rose 244.36% and outperformed its sector by 202% in the past year.

- Debt to Equity Ratio of 1.34 is higher than 1. This implies that company assets are financed through debt.

- Promoter Share Holding stayed the same in the most recent quarter at 54.91%.

- Price to Earning Ratio is 76.94, higher than its sector PE ratio of 48.08.

- Return on Equity(ROE) for the last financial year was 3.64%, less than 10%, indicating an inefficient use of shareholder's capital to generate profit.

- Interest Coverage Ratio is 1.51, higher than 1.5. This means that it is able to meet its interest payments comfortably with its earnings (EBIT).

Disclaimer: The stock just highlights the stock split and bonus issue details, 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.