Two railway stocks trading between Rs 400 to Rs 700 are set to reward investors with bonus issues and stock splits. This will likely keep the stock in trend in the coming days. The two rewards improve liquidity and make the stocks cheaper for new and existing investors. Notably, the two railway companies are also debt-free with a healthy return on equity. Who are they? They are not the top railway PSU giants like IRFC or RVNL.
But instead of a midcap and penny stockNew Delhi Wealth Management. These are, K&R Rail Engineering a penny stock with a market cap of Rs 957.25 crore on BSE, and RITES, a midcap with a market cap of Rs 16,568.82 crore as of August 6, 2024.
Currently, the stock is at Rs 689.50 apiece, with a PE ratio of 39.16x and a return on equity of 16.88%. The stock’s 52-week high and low is at Rs 826.15 apiece and Rs 432.65 apiece.
YTD, the stock has rallied by over 37% on BSEUdabur Wealth Management. While its all-time gain is about 337.17%.
The company has announced a bonus issue in the ratio of 1:1. Meaning, RITES will issue 1 (One) bonus equity share of Rs.10/- each fully paid-up for every 1 (One) existing equity share of Rs.10/- each fully paid- up, to the eligible members by capitalizing a sum not exceeding Rs. 240,30,18,870.00 out of the sum standing to the credit of ‘Capital Redemption Reserve and Free Reserves.
As per the regulatory filing, the balance in Capital Redemption Reserve and Free Reserves to be utilized for implementing the bonus issue is Rs. 240.30 Crore.
RITES has yet to declare the record date, ex-bonus date, allotment details, and distribution date for the bonus issue. However, it has mentioned that it plans to complete this corporate action within two months from the date of approval of the Board, as statutorily required.
Apart from the bonus issue, the company will also reward investors with the first interim dividend of Rs 2.50 per share (25% of paid-up share capital) of the company for FY25. The record date to determine eligible shareholders is set on August 8.
As per Trendlyne data, the consensus recommendation from 4 analysts for Rites Ltd. is HOLDPune Investment. The company’s EPS is expected to grow by 1.8% in FY25.
RITES Limited is a Navratna Public Sector Enterprise and a leading player in the transport consultancy and engineering sector in India, having diversified services and geographical reach. The company has an experience spanning 50 years and has undertaken projects in over 55 countries in Asia, Africa, Latin America, South America, and the Middle East region.
This stock is currently at Rs 452.15 apiece with a PE ratio of 78.50x and a return on equity of 17.02%. The stock’s 52-week high and low is at Rs 863.35 apiece and Rs 414 apiece respectively.
Unlike RITES, KR Rail’s share has tumbled by nearly 37% on BSE. But its all-time performance is robust with gains of 2,880.55%.
On Trendlyne, the majority of voting is to BUY K&R Rail stock. The company’s annual performance has been strong. Annual Revenue rose 70.65%, in the last year to ₹665.91 Cr. Its sector’s average revenue growth for the last fiscal year was 11.5%. While Annual Net Profit rose 23.93% in the last year to ₹7.78 Cr. Its sector’s average net profit growth for the last fiscal year was 142.17%. Also, the stock has underperformed in its sector.
K&R Rail announced its first-ever stock split in the ratio of 1:10. This means that the company will sub-divide its 1 existing equity share having a face value of Rs 10 each into ten smaller shares having a face value of Re 1 each fully paid-up.
K&R Rail said the Record Date for the subdivision of equity shares will be intimated to the Exchanges subsequently, after the approval of the resolution for sub-division by the shareholders at EGM.Indore Investment
The company is expecting to complete its stock split action in approximately 3 months from the date of receipt of approval from the shareholders of the company.
Ahmedabad Stock
