2 Smallcap Stocks with Split Announcement and Robust Financials

  • Stock Market Analysis
  • Editors Pick

Stock split provides an opportunity for retail investors to participate in the market. It also increases the liquidity in the stock. Companies opt for stock splits to boost the marketability of their shares. However, not all companies go through this mode. There are companies like M.R.F. Ltd. (NS: MRF ), Abbott India with humongous prices per equity share. IRCTC (NS: INIR ), Godawari Power Ispat Ltd (NS: GDPI ), TTK Prestige (NS: TTKL ), Indo National Ltd (NS: INNL ), R & B Denims Ltd (BO: RBDE ) are companies with a stock split record date this week. Two more companies are on this list.

Raghuvir Synthetics Ltd

Raghuvir Synthetics Ltd (BO: RAGU ) manufactures household textiles. The company produces bed linens, curtains, towels, placemats, aprons, pot holders, oven gloves, tablecloths, napkins, upholstery, and quilts. It is a small-cap company. On August 10, 2021, RSL announced a stock split in the ratio of 1:10 where each old equity share with a face value of Rs 10 will be converted into a new equity share with a face value of rupee one. The record date of the stock split is October 29 and the ex-split date is October 28.

In the June 2021 quarter, Raghuvir’s standalone net sales were Rs 57.70 crore, up 381.9% year-on-year from Rs 11.97 crore in June 2020 quarter. Its EBITDA stood at Rs 4.55 crore in Q1FY2022, up 187.97% y-o-y from Rs 1.58 crore in June 2020 quarter. The company’s quarterly net profit was Rs 2.02 crore, up 321.1% from Rs 0.48 crore in Q1FY2021. What's noteworthy is an astonishing revenue and net profit CAGR. RSL’s revenue CAGR for the 3-year, 5-year, and 10-year period remained at 66%, 32%, and 17% respectively. Its net profit CAGR for the 3-year, 5-year, and 10-year periods was 114%, 70%, and 77%. The stock’s return on equity CAGR was also double-digit at 17% for a 3-year period. The same was 12% and 8% for 5-year and 10-year periods.
RSL
Promoters held a sizable 74.91% in the company while the rest is held by the public. Although trading at a high PE of 69.11x, the stock appears good based on major technical indicators such as MACD and 20-day/50-day/100-day/200-day EMA.

Bigbloc Construction Ltd (NS: BIGB )  

Bigbloc Construction Limited provides construction materials such as building blocks, aerated autoclave concrete, and other related products. It is also a small-cap company. On October 6, the company announced a stock split of one old equity share with a face value of Rs 10 each into 5 new equity shares with a face value of Rs 2 each. Bigbloc has fixed November 16 as the record date for the sub-division of shares.  

In June 2021 quarter, Bigbloc Construction’s total income jumped 601.7% year-on-year to Rs 18.24 crore from Rs 2.6 crore in June 2020 quarter. EBITDA turned positive to Rs 2.2 crore from a negative 0.89 crore in the comparison period. EBIT too became positive to Rs 1.22 crore from a negative of Rs 1.80 crore in the June 2020 quarter. The company’s reported profit was Rs 0.41 crore from a negative of Rs 2.44 crore. Unlike the above discussed Raghuvir Synthetics Ltd, Bigbloc Construction’s financials trend over years doesn’t look good.
BBCL
Promoters’ have increased their holding to 71.09% in September 2021 quarter from 70.81% in June 2021 quarter. The scrip appears favorable based on key technical parameters such as RSI, MACD, and 20-day/50-day/100-day/200-day EMA.

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  • Prashant Vashishth @Prashant Vashishth
    Is it the right time to buy bigbloc or should wait
    Like 0
  • Praveen Kumar Mukriyantavita @Praveen Kumar Mukriyantavita
    sir. your picks are undoubtedly the best. thank you
    Like 0
  • Nisha Purohit @Nisha Purohit
    thank u sir ur suggestions r profitable
    Like 0
  • Nisha Purohit @Nisha Purohit
    thank u sir ur suggestions r profitable
    Like 0
  • SATYAJIT RAY @SATYAJIT RAY
    Write up is excellent.Sir,what is your suggestion on Deepak nitrite at present stage?
    Like 0
  • Shyam Singh Lakhawat @Shyam Singh Lakhawat
    your suggestions are very important. Thanks
    Like 1
  • Shyam Singh Lakhawat @Shyam Singh Lakhawat
    your suggestions are very important. Thanks
    Like 0
  • TK SINGH @TK SINGH
    Can we take position in bigblock
    Like 0
  • prabhu selvaraj @prabhu selvaraj
    SIR which stock best for SIP plan
    Like 0
    • Sameer Padole/Investing.com @Sameer Padole/Investing.com
      @prabhu selvaraj Major IT, FMCG cos and RIL with a long term horizon
      Like 0
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  • Sanjeev Aggarwal @Sanjeev Aggarwal
    GRM Overseas also announced stock splyin the ratio 1:5. Record date may be announced anytile now.
    Like 1
  • Varun Bajla @Varun Bajla
    GHCL stock split in Dec 1st week. strong financials.
    Like 3
  • Jayesh Nirgude @Jayesh Nirgude
    I brought gpil
    Like 0
  • Rohit Kh @Rohit Kh
    Should one buy before split?
    Like 3
    • Harish Shanmuganathan @Harish Shanmuganathan
      continuous UC in RSL. Will we get a chance to enter?
      Like 0
    • Ajit Pardeshi @Ajit Pardeshi
      continuous UC means it's a flashing red signal. punters have cornered the share. be careful.
      Like 4
    • Sameer Padole/Investing.com @Sameer Padole/Investing.com
      @Ajit Pardeshi Good observation.
      Like 0
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