10:1 Bonus Issue, Huge Rs 150/ Sh Dividend YTD; Time To Invest In This Tobacco Stock Below Rs 350?

Radhakishan Damani-backed tobacco company, VST Industries ended the trading week from November 18-22 on a positive note. Broadly, its weekly performance is up by 1% on BSE, while year-to-date, the stock is up by 2%. VST has rewarded investors with strong bonus issue of 10:1 ratio and hefty dividends of Rs 150 per share in 2024 so far. Trading below Rs 350, is it the right time to buy in VST Industries?

VST Industries Share Price:

VST Industries stock price closed at Rs 313.45 apiece, broadly flat on BSE with market cap of Rs 5,324.30 crore. The stock's 52-week high and low is at Rs 486.70 apiece and Rs 292.36 apiece. While its price-to-equity ratio is at 21.91x, and return to equity is at 21.45%.

VST Industries Share Recommendation:

As per MarketsMOJO, VST Industries, a midcap company in the cigarettes/tobacco industry, has been upgraded to a 'Hold' by MarketsMojo due to its high management efficiency and low Debt to Equity ratio. However, the stock has underperformed the market with a return of only 6.94% in the past year and has shown poor long-term growth. Investors may want to wait for more positive momentum before investing.

While the Trendlyne data revealed that the consensus recommendation from 1 analyst for VST Industries Ltd. is SELL. EPS is expected to reduce by 90.0% in FY25. However, the 1-year average target price is at Rs 327, which is an indication of nearly 4% potential upside in the near term.

VST Industries Bonus Issue:

The company has allotted 15,44,19,200 Equity Shares of Rs.10/- each as bonus shares. VST turned ex-date on September 6 for its bonus issue ratio of 10:1. This meant that the company allotted ten new equity shares having a face value of Rs 10 each to be allotted on one existing share with a face value of Rs 10.

While the 10:1 bonus issue is the first for VST Industries, the company has not split its shares as of now. Meanwhile, since May 2001, VST Industries has held a track record of paying hefty dividends. So far, the company delivered about 24 dividends. In the last 12 months, the company paid up to Rs 150 dividend per share.

About VST Industries:

The Vazir Sultan Tobacco Company Limited was incorporated on 10th November 1930, under the Hyderabad Companies Act No. IV of 1320 Fasli and now governed under the Companies Act, 1956/2013. The name of the Company was subsequently changed to VST Industries Limited on 30th April 1983. The Company has its Registered Office in Azamabad, Hyderabad.