Low D/E and P/B ratio stock declares 1:5 stock split, promoter stake up in Q3
With a market valuation of ₹676 Cr, Visaka Industries is a small-cap business that operates in the cement industry.
PremiumWith a market valuation of ₹676 Cr, Visaka Industries is a small-cap business that operates in the cement industry. Visaka Industries was founded in 1981 and started producing corrugated fibre cement sheets in 1985 at Patancheru, Telangana, with an initial annual manufacturing capacity of 36,000 tonnes. Moreover, Visaka produces yarn and serves as a global supplier for a range of fabric applications, including clothing, furniture, automotive materials, and other technical textiles. Market watchers may be aware that the corporation has declared a stock split in a ratio of 1:5 for the eligible shareholders.
The company has said in a stock exchange filing that its Board of Directors has “Approved the Sub-Division / Split of 1 (One) Equity Share of face value of Rs.10/- (Rupees Ten Only) each fully paid up into 5 (Five) Equity Shares of Rs. 2/- (Rupees Two Only) each fully paid up, subject to the approval of the members of the Company, such other statutory / regulatory approvals as maybe required. The record date for the sub-division of equity shares shall be decided by the Board / Management Committee of the Board and will be intimated to the exchanges."
Stating the rationale behind the split, the Board said the stock split has been announced to enhance the liquidity in the capital market, to widen shareholder base and to make the shares more affordable to small investors and the expected time of completion is capped within 3 months from the date of members approval.
During Q3FY23, the company recorded a net profit of ₹3.35 Cr, down by 86.04% from ₹23.99 crore recorded in Q3FY22. The company said its revenue from operations reached ₹356.52 crore in the quarter ended December 2022, up by 0.70% from ₹354.06 reported in the quarter ended December 2021. The company said its net expenses stood at ₹350.86 Cr in Q3FY23 compared to ₹324.24 Cr recorded in the year-ago quarter. The EPS of Visaka Industries reached ₹1.94 in Q3FY23 against ₹14.55 in Q3FY22.
The shares of Visaka Industries closed today on the NSE at ₹393 apiece level, up by 2.93% from the previous close of ₹381.80. The stock recorded NSE + BSE volume average of 174,382 shares and a delivery volume average of 5,733,680 shares or 32.88%. In the last 1 year the stock has fallen 27.14% and on a YTD basis, it has fallen 11.61% so far in 2023. The stock touched a 52-week-high of ₹664.00 on (19-Sep-2022) and a 52-week-low of ₹373.20 on (13-Feb-2023).
As per the data of Trendlyne, Visaka Industries holds a debt to equity (D/E) ratio of 0.2 is less than 1, implying that the company is actively financing its assets through equity and on the other hand the company has a price to earning (P/E) ratio of 8.6, lower than its sector PE ratio of 39.6. Promoters' shareholding in Visaka Industries climbed from 48.36% in Q2FY23 to 48.42% in the December 2022 quarter, while FII/FPI shareholding fell from 4.53% to 3.72%. Mutual Funds' holdings were stable at 0.01% in the third quarter of FY23, and promoters pledged 0.96% of the shares in the previous quarter, bringing the total proportion of promoter holdings pledged to 15.21%. The stock is trading at a price-to-book (P/B) ratio of 0.89 which is lower when compared to its rivals such as Hil Ltd, Everest Ind, BIGBLOC Construction, Sahyadri Ind and Navkar Urbanstructure.
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