Bonus Issue of 10:1 - Record Date 6th September; Should Investors Buy Stake In Radhakishan Damani’s Stock?

Hyderabad's Azamabad serves as the registered office of VST Industries Limited. The company's main business operations are the production and distribution of cigarettes and unprocessed tobacco. It has manufacturing facilities in Hyderabad and Toopran, Telangana. The National Stock Exchange of India Limited and BSE Limited both list the company's shares. VST Industries has a market capitalisation of Rs 7,325.18 Cr, making it a small-cap company. Tuesday's closing price of the shares was Rs 4743.70. The stock recorded a 52-week-high of Rs 4,922.50 on (27/08/2024) and a 52-week-low of Rs 3,159.90 on (26/10/2023).

VST Industries Bonus Shares

"Pursuant to Regulation 42 of Listing Regulations, the Company has fixed Friday, 6th September, 2024 as the revised Record Date for the purpose of determining the names of Members who shall be entitled for allotment of bonus equity shares in the ratio of 10:1 i.e. 10 (Ten) new fully paid-up equity shares of Rs. 10/- each for every 1 (One) fully paid-up equity share of Rs. 10/- each held by the Members of the Company. The Bonus Issue of the Company is subject to the Approval of Members of the Company at the 93rd Annual General Meeting scheduled to be held on 29th August, 2024. To the Members who hold equity shares in dematerialized form, the Bonus Equity Shares shall be credited to the respective beneficiary accounts of the Members with their respective Depository Participant(s) and in the case of Members who hold equity shares in physical form, the Bonus Equity Shares shall be allotted in compliance with the guidelines issued by SEBI," said VST Industries in a stock exchange filing.

VST Industries Q1 Results

In Q1 FY25, VST Industries recorded a net profit of Rs 53.58 crore, a 36% fall from the PAT of Rs 83.70 crore in Q1 FY24. In the quarter that ended in June 2024, sales dropped by 3.76% to Rs 320.62 crore, from Rs 333.13 crore in the quarter that ended in June 2023. In Q1 FY25, profit before tax was Rs 72.28 crore, a drop of -33.9% from Q1 FY24's Rs 109.34 crore. In Q1 FY25 compared to Q1 FY24, total operating expenditures climbed by 8.8% to Rs 248.05 crore. VST Industries is one of the portfolio stocks of Radhakishan S Damani in which the ace investor held 5,35,185 fully paid-up equity shares comprising a 3.47% stake in the company during the quarter ended June 2024.

VST Industries Share Price Target

"Publicly-listed Cigarette company VST Industries is currently trading close to its 2020 year's high. Based on this current price movement and market sentiment, the company's stock is likely to break out of this resistance. It should be noted that the company's PE ratio of 26.36 is lower than the sector PE of 31.86, indicating undervaluation. The company has also offered a robust ROE of 24.08%, making it appealing to many market participants. Those willing to explore the stock's potential should consider entering the buying range of Rs. 4,650-4,750, with a target price set between Rs. 5,000-7,000. They may hold this stock for 1-7 months and closely follow a stop loss of Rs. 4,000 to limit loss in case of any downturn," said V.L.A. Ambala, a Research Analyst (SEBI Registered), Co-founder - Stock Market Today (SMT).

Disclaimer

The recommendations made above are by market analysts and are not advised by either the author, nor Greynium Information Technologies. The author, nor 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.