Garware Technical Fibres, a textile products maker, turned ex-bonus for a 4:1 bonus issue ratio on Friday, January 3, 2025. The company will allot 4 free shares on the existing 1 piece. Garware is a smallcap company. However, Garware witnessed selling pressure on its ex-date. The consensus recommendation is BUY on Garware stock, however, brokerage CD Equisearch on Friday suggested HOLD.
Garware Technical Fibres Share Price:
The stock price ended at Rs 912.65 apiece on its ex-bonus date, down by 1.8% on BSE, with a market cap of Rs 9,059.50 crore.
Adjusted to the bonus ratio, the stock's new 52-week high and low are at Rs 4,925.80 apiece and Rs 885 apiece. Further, the stock's price-to-equity ratio is at 8.04x, while return on equity is at 19.96%.
Garware Technical Fibres Bonus Issue:
Garware will issue 7,94,12,676 fully paid-up Bonus Equity Shares of Rs. 10/- each in the ratio of 4:1 i.e., 4 (Four) new fully paid-up bonus equity shares of Rs. 10/- each for every 1 (One) existing fully paid-up equity shares of Rs. 10/- each held by the members of the Company as on Friday, January 03, 2025 ("Record Date").
Hence, only those investors will be eligible for the bonus shares, who are holding Garware Technical stock by the end of the record date. This bonus issue comes after the company paid up to Rs 3 dividend per share with an ex-date on September 12, 2024.
Bonus shares are one of the many corporate actions that listed companies announce on several occasions. Bonus shares are like incentives which are free of cost given to investors. Under this corporate action, new shares are issued at the existing Face Value of equity shares of the company. Hence, the face value remains the same post-bonus issue.
Recently, the company has been informed by the Registrar and Share Transfer Agent (URTA") of the Company that they have changed their name from Link Intime India Private Limited to MUFG Intime India Private Limited with effect from 31st December, 2024.
Garware Technical Fibres BUY Recommendation:
As per Trendlyne data, the consensus recommendation from 1 analyst for Garware Technical Fibres Ltd. is STRONG BUY. EPS is expected to grow by 12.6% in FY25.
CD Equisearch's research report dated January 3, said, with increased investment in infrastructural development by the Indian Government, GTFL is seeking to capture the opportunity lying for geo synthetics business in the domestic market. In India, GTFL deals in landfill lining as well. But in the export market, the Company does only supply of products and not execution. The market for geo synthetics is huge and the Company will be cautious in identifying and accepting any related projects.
Further, the brokerage's note said, "The stock currently trades at 38.8x FY25e EPS of Rs 23.97 and 33.9x FY26e EPS of Rs 27.40. Aquaculture is one of the most lucrative businesses for Garware. The Company is constantly thriving to maintain its market share in the global markets accompanied by new product development which aims to reduce carbon footprint. The management is also refocusing to streamline its product, "value added ropes" which has the ability to sharpen its competitive edge."
On the valuation, CD Equisearch said, "Yet overreliance on new products could hinder business scaling if such products find less favor with customers. Weighing odds, we assign 'hold' rating on the stock with target price of Rs 877 (previous target: Rs 705) based on 32x FY26e earnings."
About Garware Technical Fibres:
Established in 1976, the company today is a multi-divisional, multi-geographical technical textiles company and is known for providing world-class innovative solutions in high-performance aquaculture cage nets, fishing nets, sports nets, safety nets, agricultural nets, coated fabrics, polymer ropes and geosynthetics.
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