Four PSU stocks are in focus as they will turn ex-dividend and ex-split in May 2024. 3 of them are public sector banks, while one is a defence PSU stock. These are Canara Bank and Bharat Dynamics who are splitting for the first time ever, while the other two PSBs are Bank of Maharashtra and UCO Bank as they will pay the final dividend for FY24.
1. Bank Of Maharashtra:
This 88-year-old PSU bank is going to reward investors with a final dividend of Rs 1.40 per share for FY24. The stock will turn ex-dividend on May 10 for the same.
Currently, the bank's stock is at Rs 68.40 apiece on BSE with market cap of Rs 48,436.60 crore. YTD, the stock gained by 50%, while in a year, the stock is up by 125% on BSE.
There is no brokerage buy or sell call on Bank of Maharashtra currently, however, Ventura Securities has highlighted about the lender's Q4 earnings. As per Ventura, the bank experienced significant growth across various financial metrics during FY24. Total business surged by 15.94% to reach ₹ 474,411 crore, driven by substantial increases in both total deposits and gross advances. Also, the bank demonstrated improvements in asset quality, with GNPA declining to 1.88% and NNPA reducing to 0.20%. PCR also showed improvement, reaching 98.34%.
2. UCO Bank:
On the same day as Bank of Maharashtra, UCO Bank will also turn ex-dividend on May 10 for its final dividend of Rs 0.28 per share for FY24. There is no brokerage buy or sell call on UCO Bank currently.
Currently, UCO Bank's stock is at Rs 55.53 apiece with a market cap of Rs 66,391.44 crore. YTD, UCO Bank shares have zoomed by 38%, while in a year, the stock jumped 96%.
Founded in 1943, UCO Bank is a commercial bank and a Government of India Undertaking. Its Board of Directors consists of government representatives from the Government of India and Reserve Bank of India as well as eminent professionals like accountants, management experts, economists, businessmen, etc.
3. Canara Bank:
Unlike the above two PSBs, Canara Bank will be in focus for its first stock split in the ratio of 1:5. The Bank has fixed Wednesday, 15th May 2024 as the "Record Date" for determining entitlement of Equity Shareholders for sub division/ split of existing Equity Shares of the Bank, such that 1 (one) equity share having face value of Rs. 10/- (Rupees Ten only) each, fully paid up, will be sub-divided into 5 (Five) equity shares having face value of Rs. 2/- (Rupees Two only) each, fully paid up, ranking pari-passu in all respects.
In terms of stock split, the share capital remains the same, however, a number of equities rise and the price becomes affordable for both new and existing customers.
Currently, Motilal Oswal has recommended BUY on Canara Bank for a target price of Rs 650. While earlier, Way2Wealth brokerage also recommended BUY on Canara Bank for a target price of Rs 680. According to its research note, "Multiple levers are in place for the bank to positively impact its price performance. Thus, we remain positive on the stock and arrive at a target price of 670, implying 0.96x FY26e P/BV. Hence we recommend buying at the current valuation."
At present, Canara Bank's share price is at Rs 625.40 apiece with a market cap of Rs 1,13,455.71 crore. YTD, Canara Bank's shares rallied by 41%, while in a year, the stock jumped by nearly 99.6% as of now.
4. Bharat Dynamics:
This defence PSU stock has also announced its first ever split in the ratio of 1:2. BDL announced that its existing 1 (One) Equity Share of the face value of Rs. 10/- (Rupees Ten Only) each fully paid up into 2 (Two) Equity Shares of the face value of Rs. 5/- (Rupees Five Only) each fully paid up.
BDL sets May 24 as the record date for its 1:2 split.
BDL has broadly met brokerages' targets. There is a short-term buy recommendation by brokerage Antique Stock Broking to buy BDL shares for a target of Rs 2,045. Antique expects the earnings per share (EPS) of BDL to rise to Rs 47.8 in FY25 and further to Rs 63.9 in FY26. While its price-to-equity ratio is estimated to jump to 72.4x in FY25 and to 53.5x in FY26. Also, the brokerage forecasts a 23.4% return on equity and a 32% return on capital employed by the end of FY25.
This defence stock is currently at Rs 1959.50 with a market cap of Rs 35,913.96 crore. YTD, the stock has advanced by 14%, and in a year, the stock climbed by 94%.
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