2:1 Stock Split Coming! Small Cap Stock Dips 2%, Record Date On Jan 20; Should You Buy Now?

Shares of small cap Nava Ltd. today are trading at Rs. 933 with a 2.64% loss as the record date for the stock split approaches. The company on 27 December announced the record date for the subdivision of its stocks in a 2:1 ratio.

Nava Ltd, headquartered in Hyderabad, is a manufacturer of ferroalloy in India and is a publicly listed multinational corporation that is involved in power generation, metals, mining, healthcare, and commercial agriculture as well. The firm has an expanded operation in Africa and Southeast Asia.

Nava Ltd. Stock Split

On November 14, 2024, the company announced the stock split in an effort to improve the liquidity of its stocks and double the number of shares in the market, while the overall value of an investor's holdings remains unchanged.

"The Board of Directors of the Company at its meeting approved the sub-division/split of each equity share of the Company having a face value of Rs. 2/- (Rupees Two only) each, fully paid-up, into 2 (Two) equity shares having a face value of Re. 1/- (Rupee one only) each, fully paid-up," said Nava Ltd. in its exchange filing.

Nava Ltd. Shares Performance Recently

The shares of this ferroalloy company has been quite profitable in the last six months with a 25% upside on the prices. Over the past year, the company's shares have appreciated by an impressive 100%, even during a volatile market environment. The long-term performance of Nava Ltd. is particularly noteworthy, with the stock delivering a staggering 1,000% return to investors over the last five years becoming a small-cap multibagger.

However, recent share performance has been relatively subdued. On January 8th, Nava Ltd. shares traded at Rs. 931, showing a decline of 2.75% by 1:00 pm. The company, with a market capitalization of Rs. 13,520 crore, has seen its stock price fluctuate between a 52-week high of Rs. 1,347 and a 52-week low of Rs. 435, according to BSE data.

Nava Ltd. Financials Report:

In the July-September 2024 quarter, the company reported consolidated net sales of Rs. 900.48 crore, registering a 2.33% decline compared to Rs. 921.99 crore in the same period last year. The slight drop in sales indicates a challenging market environment; however, the company's profitability metrics demonstrated significant improvement during this period.

For Q2 FY25, the consolidated net profit surged to Rs. 251.08 crore, marking a robust 69.33% growth from Rs. 148.28 crore recorded in Q2 FY24. Additionally, the company's earnings before interest, taxes, depreciation, and amortization (EBITDA) grew by 14.35%, rising from Rs. 398.92 crore in the September 2023 quarter to Rs. 456.15 crore in the September 2024 quarter. The impressive profit growth and EBITDA expansion suggest that the company's long-term strategy is yielding positive results.