Debt free stock with low PE ratio declares ₹9.25 dividend, PAT up 40% in Q3

India Nippon Electricals Ltd is a small-cap company having a market cap of ₹863.23 Cr and the company deals in the consumer discretionary sector. The company makes electronic ignition systems for portable engines, three-wheelers, and two-wheelers. Even though it is debt-free, the firm announced a staggering 185% dividend when it announced its Q3 earnings, which is like icing on the cake for eligible shareholders.

The company said in a stock exchange filing that the Board of Directors “declared an Interim Dividend of Rs.9.25 (Rupees nine and paise twenty five only) per fully paid up equity share of Rs.5 each, for the financial year 2022-23. The interim dividend will be paid/ dispatched within the due date to all the shareholders whose names appear in the Register of Members as on the Record Date. The Board of Directors fixed the Record Date as February 24, 2023 for this purpose.”

During Q3FY23, the company reported a net profit of ₹13.56 crore, up by 40.81% YoY from ₹9.63 crore in Q3FY22. The company said in a stock exchange filing that its revenue from operations reached ₹156.19 crore in the quarter ended December 2022 compared to ₹148.04 Cr in the quarter ended December 2021, representing a growth of 5.51% YoY. India Nippon Electricals said its net expenses stood at ₹147.68 Cr in Q3FY23 against ₹138.53 Cr in the year-ago quarter, whereas the EPS of India Nippon Electricals reached ₹6.00 in Q3FY23 compared to ₹4.26 recorded in Q3FY22.

The shares of India Nippon Electricals Limited closed today on the NSE at ₹381.35 apiece, up by 0.73% from the previous close of ₹378.60. The stock recorded a net NSE + BSE volume average of 14,593 shares and a delivery volume average of 650,848 shares or 44.6%. In the last 1 year the stock has fallen 13.11% and on a YTD basis it has fallen 4.10% so far in 2023. 

The stock touched a 52-week-high of ₹506.00 on (15-Sep-2022) and a 52-week-low of ₹319.70 on (20-Jun-2022), indicating that at the current market price, the stock is trading 24.63% below the 1 year high and 19.28% above the 1 year low. As per the data of Trendlyne, India Nippon Electricals recorded a debt-to-equity ratio of zero in FY22 and the stock is trading at a price-to-earning ratio of 16.2, lower than its sector PE ratio of 36. During Q3FY23, the company reported a promoter shareholding of 70.38%, FIIs stake of 0.11%, and a public stake of 29.51%.