This Multibagger Stock With 1-Year Return Of 1679% to Soon Turn Ex-Bonus: Check Details

Sindhu Trade Links- a diversified commercial services firm is a small cap scrip with a market capitalization of Rs. 5283.68 crore. The firm on April 8, 2022 announced bonus share issuance. Interestingly, the company is a multibagger stock with 1-year return at a mind-boggling 1679%, while its YTD return are over 38%.

About the company:

Sindhu Trade Links Limited (STTL) is flagship company of the conglomerate engaged in the business of logistics, transportation, mining, coal beneficiation,
power generation, sponge iron and steel, stock broking, media, finance and food processing
park.

Headquartered in Delhi-NCR, STTL is a 'one-stop shop' for a wide spectrum of support services required for mining and allied activities, logistics and transportation. STTL s has 5 subsidiaries and associates, involved in diversified businesses, namely 1. Hari Bhoomi Communications Private Limited-Media Business, 2. Sudha Bio Power Private Limited - Bio
Mass Based Power Generation, 3. Indus Best Mega Food Park Private Lirnited - Development
of Food Park for Food Processing lndustries, 4. Shyam lndus Power Solutions Private Limited
- EPC of Power Distributioo Power Transmission, Railway OHE, Railway Track Laying, and
5. Param Mitra Resources Pte. Limited - Overseas Coal Mining. For Overseas Coal Mining
businesses, the Company has several step-down subsidiaries, associates, joint ventures in
Aushalia, Hong Kong, Singapore and Indonesia.

 

Sindhu Trade Links Bonus share issue details:

The company's board on April 8, 2022 approved bonus shares and the company in its exchange filing said, "as part of company's endeavours to increase shareholders wealth, the Board has approved the issue of Bonus Equity Shares to the existing shareholders in the ratio of 2:1, i.e. 2 Bonus Equity Share of Rs. 1/- each for every 1 existing Paid Up Equity Share, held by the shareholders on a record date, subject to statutory and other required approvals".

Further the company in the annexure attached reveals that the Bonus issue of Equity Shares are proposed to be
issued out of the free reserves and securities Premium account.

 

Sindhu Trade Links financials, fundamentals

The company's financials have been improving with Q3Fy22 consolidated net profit reported at Rs. 28.22 crore as against a net loss of Rs. 28.24 crore in the preceding quarter. This is also a considerable gain in comparison to Q3Fy21 net loss of Rs. 8.94 crore. Revenue from operations at the concern have also registered an increase in the December quarter to Rs. 281.5 crore as against Rs. 206.62 crore in the same period a year ago.

Further in another company update dated February 4, 2022, the company mentions that it has pared Bank debt by Rs. 1041.5 million and aims to be Debt Free by 2023. This is another strong aspect to look at about the company.

On the development Mr. Satya Pal Sindhu, Managing Director of the Company said "l am very happy that we are mouing towards becoming a Zero Debt Company, repayment of bank-debts amounting more than Rs. 1000 million in last 15-18 months not only shows resolve of the company management but also signifies company's financial strength, The bank-debt reduction'll result into huge perpetual savings in interest expense, increased profitability and stronger financials, better credit ratings etc."

Coming to its fundamentals, the stock is at a premium valuation with a TTM P/E of 109.36 as against the industry PE of 33.9. Nevertheless on the positive front, it is constantly working to pare its debt and is aiming to be debt free by Fy23. Also, its RoE of over 9% is comparable to peers in the industry.

 

Conclusion:

Earlier during the year this multibagger stock of 2021 was said to be the multibagger of this year too i.e. multibagger of 2022, nevertheless in the ongoing correction it has pared its gains which at one point went up to 80% on a YTD basis. So, given the probability of gains from the diversified commercial services firm considering its improving financials one can buy into stock for its bonus shares and also stock price appreciation in the medium term. Note the last date to buy into the stock for the bonus shall be before its ex-date i.e. May 19, 2022, while the record date based on which bonus share issuance will be decided is May 21, 2022.

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