Micro cap stock to look out for after company’s board announced 1:1 bonus issue

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Micro cap stock to look out for after company’s board announced 1:1 bonus issue
Credit: © Reuters.

On, Saturday, the shares of the largest paint contractor hit 5 percent upper circuit after the company’s net profit and revenue increased by 30 percent and 13 percent in H2FY24, respectively, and also announced the issue of bonus shares in 1:1 ratio.

With a market capitalization of Rs 83.11 crore, the shares of Siddhika Coatings Ltd closed at Rs 269 per share, increased around 5 percent as compared to the previous closing price of Rs 256.20 per share.

Its Revenue from Operations half yearly grew by 30 percent from Rs. 16.98 Crores in H1FY24 to Rs. 22.11 Crores in H2FY24 and it grew by 14 percent from Rs. 19.41 Crores in H2FY23 to Rs. 22.11 Crores in H2FY24. Annually it generated a revenue of Rs. 34.07 Crores in FY23 to Rs. 39.09 Crores in FY24, indicating a growth of 14 percent.

Its Net profit half yearly grew by 17 percent from Rs. 2.31 crore in H1FY24 to Rs. 2.71 Crore in H2FY24 and it grew by 20 percent from Rs. 2.24 Crores in H2FY23 to Rs. 2.71 Crore in H2FY24. Annually it generated a Net Profit of Rs. 3.77 Crores in FY23 to Rs.5.03 Crores in FY24, indicating a growth of 33 percent.

Moreover, the company announced a bonus issue of equity shares in the proportion of equity shares of Rs 1 each for every equity share of Rs 1 each held by the shareholders of the company.

The company’s profitability measures show an incline in return on equity (RoE) from 7.04 percent in FY 21-22 to 13.72 percent in FY 22-23, while, during the same period return on capital employed (RoCE) increased from 8.60 percent to 17.65 percent. In contrast, the net profit margin (NPM) was 10.94 percent in fiscal year 22-23.

In the company’s recent shareholding pattern, promoters own 63.09 percent while Retail shareholders own a 36.91 percent stake in the company and domestic Institutional Investors own a 0 percent stake.

Siddhika Coatings Limited is an Indian-based firm. The Company imports and exports natural and synthetic resins, molding powders, adhesives and cement, oil Daints, distempers, cellular paints, colors, varnishes, enamels, gold and silver leaf enamels, soap, and other products.

Written by:- Abhishek Singh

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