Rs 7/Share Dividend: Smallcap Stock To Trade Ex-Dividend On November 10; How To Be Eligible?

Smallcap stock, CARE Ratings will be in focus this week as its share price will trade ex-dividend for dividend payout to the tune of 70%. Due to dull Q2 earnings, CARE's stock witnessed selling pressure last week.

As per the regulatory filing, the company declared and approved payment of Interim Dividend of Rs 7 per equity share of face value of Rs 10 each for the Financial Year 2023-24. To be eligible for this dividend payout, investors need to hold the CARE Ratings shares by the end of the record date.

The company has fixed the record date as Friday, November 10, 2023, for the purpose of determining the eligibility of Members entitled for the payment of Interim Dividends for Financial Year 2023-24.

In FY23, the company paid a total dividend of 250% amounting to Rs 25 per share.

In the trading week that ended on November 3rd, CARE's share price dipped by over 7% on BSE. Last week, on Friday, the stock ended at Rs 846.65 apiece, down by 0.2%. The market cap stood at Rs 2,520.73 crore.

However, CARE's shares are still higher by 72.43% from its 52-week low of Rs 491 apiece on BSE. The stock's 52-week high is at Rs 1,009.80 apiece.

During Q2FY24, the company posted a standalone net profit of Rs 40.75 crore as against Rs 38.47 crore in Q2FY23. Total income also picked up to Rs 96.62 crore, as against Rs 86.12 crore in the same quarter a year ago. EBITDA was marginally up to Rs 45.35 crore from Rs 44.67 crore in Q2FY23.

Mehul Pandya, Managing Director & CEO of CARE Ratings said, "During Q2 FY24, fundraising activity by businesses did experience a marginal slowdown, and commercial paper issuances declined, primarily in response to the overall increase in interest rates. However, the growth in gross bank credit witnessed double-digit expansion, largely driven by the retail and services segments. However, the bank credit to industry grew by 6.1% till August 2023, with large industries recording a growth of 5.4%."

Further, Pandya said "our research indicates that there is steep slowdown in net new projects announcements in the first half of FY24. The value of new projects announced fell to Rs 1.2 trillion in Q2 FY24 from Rs 6.6 trillion in Q1 FY24. Additionally, the value of dropped projects rose from Rs 3 trillion in the Q4 FY23 to Rs 4.2 trillion in Q1 FY24 and Rs 4 trillion in Q2 FY24. A rise in the value of dropped projects along with a slowdown in announcements of new projects pushed net new projects in the negative territory in H1 FY24. Net new projects fell into negative territory for the first time since March 2021."

So, despite the challenging Q2FY24, Pandya added, "CareEdge Ratings reported YoY growth of over 14% in its consolidated Operating Income. The growth was principally driven by continued traction in our Initial Ratings business and improved revenue contribution from non-ratings businesses. With our unflinching emphasis on Quality-led growth across the sectors and dedicated outreach, we look forward to sustaining this momentum."

CARE Ratings Ltd. is one of India's leading credit rating companies with a track record of servicing diverse sectors for over 3 decades. It also provides credible and high-quality research and analytics. The company's ratings cover a wide range of sectors, including banking, finance, insurance, infrastructure, and manufacturing.