3M India, a diversified company into segments of industrial, electronics, healthcare and consumer, is a midcap stock that will turn ex-dividend soon for 2024's highest rewards to the tune of Rs 685 dividend per share. In a year, the stock has rallied by nearly 27%. Brokerage ICICI Securities is the latest to recommend buying and raising its target price on 3M India due to its strong spike in dividend payout ratio and EVA accretive.
3M India Share Price:
On June 7, 3M India's share price ended at Rs 33,747.40 apiece, down by 0.43% on BSE with a market cap of Rs 38,016.68 crore. The stock's 52-week high and low is at Rs 39,809.65 apiece and Rs 26,361 apiece respectively.
YTD, 3M India shares are down by 8.4% on BSE. But in a year, the stock zoomed by 27%. Notably, the all-time gains in the stock stood at 15,163.30% as of now. The stock was merely at Rs 220 on July 11, 1997.
3M India Dividend:
The midcap player has recommended a final dividend of Rs 160 per share and a special dividend of Rs 525 for FY24 at a face value of Rs 10 each. Together, the dividend payout will be Rs 685 per share ahead.
For the said dividend, 3M India fixed July 5, 2024 (Friday) as the Record Date for determining the entitlement of the shareholders for the payment of aforesaid Dividends. The Final and Special Dividend, if approved shall be paid/dispatched to the shareholders within 30 days from the date of AGM of the Company.
The company's AGM is scheduled for August 7, 2024.
This dividend payout comes after a final reward of Rs 100 per share in FY23, and Rs a special dividend of Rs 850 in 2022.
Since April 2003, the company has delivered 5 dividends, as per Trendlyne data.
3M India Share BUY!
FY24 sales on a consolidated basis stood at Rs 4,189 crore, up by 5.8% YoY. EBITDA is at Rs 837 crore, registering a growth of 19.6%. Meanwhile, PAT is at Rs 583 crore, up by 13.7% YoY. The company's margin expansion was driven by a 230bps reduction in material cost.
In its latest research report, ICICI Securities said, that 3M India has declared/paid a total dividend per share (incl. special dividend) of INR 1,635/share over FY22-24, indicating a dividend payout ratio of 141%. Adding it said, " We see the change in dividend policy as a structural re-rating event. Before FY22, the company used to hold large cash which used to impact return ratios. We believe the change in dividend policy is EVA accretive."
The brokerage further noted that its healthcare segment, after a YoY revenue decline in Q3FY24, has reported robust growth in Q4FY24 with strong EBIT margin expansion. Similarly, the consumer segment has reported improvement in sequential performance over the past three quarters. It also believes a steady revival in consumer demand has started reflecting in segmental performance.
Also, the brokerage nodded, "The company has announced a total dividend per share of INR 685, including a special dividend of INR 525/ share. We note there is a material increase in dividend payout with a total dividend payout ratio of 141% over FY22-24. The company will still have net cash of more than INR 10bn on its balance sheet even after paying a special dividend announced in Q4FY24."
Lastly, the brokerage added, "We remain positive on 3M India led by established competitive advantages. Maintain BUY with a revised DCF-based target price of INR 39,500 (implying 62x FY26E EPS; earlier TP: INR 38,400)."
Disclaimer: The recommendations made above are by market analysts and are not advised by either the author or Greynium Information Technologies. The author, the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.In advises users to consult with certified experts before making any investment decision.
Click it and Unblock the Notifications
Sign in with Google