These two micro-cap companies surged after announcing bonus share issuance alongside strong financial performance and strategic initiatives.
Stock Movement of both companies
Linc Limited and Sky Gold Limited demonstrated positive momentum. Linc opened at ₹671 and is currently trading at ₹665.50, after touching a high of ₹697.40, marking an 8% surge. Meanwhile, Sky Gold Limited opened at ₹3,598.90 and currently trading at ₹3,616.70, which is also its day’s high, registering a 5% gain in today’s trading session.
Linc Limited
A prominent player in India’s writing instruments sector, this Kolkata-based manufacturer has built a strong presence since 1994. Known for premium stationery products, the company leverages strategic partnerships with international brands, including exclusive distribution rights for Mitsubishi Pensils (Japan) and Besia (Taiwan), enhancing its market position.
Financial Highlight:
Coming into the financials of Linc Limited, the company’s revenue from operations increased by 3.08% YoY, from Rs. 487 crore in FY23 to Rs. 502 crore in FY24.
Operating profit decreased by 9.68% YoY from Rs. 62 crore to Rs. 56 crore. Net profit showed a decline of 8.11%, from Rs. 37 crore in FY23 to Rs. 34 crore in FY24. Operating profit margin (OPM) decreased from 13% to 11% year-over-year
The basic earnings per share (EPS) decreased by 8.79%, dropping from Rs. 25.15 in FY23 to Rs. 22.94 in FY24. However, the company maintained a healthy dividend payout ratio, increasing from 20% in FY23 to 22% in FY24, showing commitment to shareholder returns
Corporate Action:
Linc Limited has announced its board will consider two key proposals on October 29, 2024. The company plans to split its existing equity shares from their current face value of Rs.10, followed by a bonus share issuance. This strategic decision, which requires shareholder approval, aims to improve stock liquidity through share subdivision and reward investors through bonus shares by capitalising company reserves. The announcement comes alongside the scheduled review of Q2FY25 financial results. despite the profit decline.
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Sky Gold Limited
A specialised B2B jewellery manufacturer focusing on innovative gold ornament designs. The company serves mid-tier jewellers and boutique stores nationwide, providing crafted pieces for both online and retail distribution channels. Their business model emphasises quality craftsmanship while catering to evolving market demands.
Financial Highlight:
Coming into the financial analysis of Sky Gold Limited, the company’s revenue from operations increased significantly by 51.21% YoY, from Rs. 1,154 crore in FY23 to Rs. 1,745 crore in FY24.
The profit metrics show remarkable growth, with operating profit growing by 108.11% YoY from Rs. 37 crore to Rs. 77 crore. Net profit showing a substantial increase of 110.53%, from Rs. 19 crore in FY23 to Rs. 40 crore in FY24. Operating profit margin (OPM) improved from 3% to 4% year-over-year
The basic earnings per share (EPS) demonstrated strong growth of 76.56%, increasing from Rs. 17.32 in FY23 to Rs. 30.58 in FY24. The company also introduced dividend payments, with a payout ratio of 3% in FY24 compared to 12% in FY23.
Corporate Action:
Sky Gold Limited has scheduled a pivotal board meeting for October 26, 2024, where directors will deliberate on significant capital restructuring initiatives. The jewellery manufacturer plans to increase its authorised share capital, requiring amendments to its Memorandum of Association, and consider issuing bonus shares to reward shareholders. In compliance with insider trading regulations, the company has implemented a trading window closure from October 23 to November 17, 2024.
Written By Fazal Ul Vahab
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