5 Stocks to Watch Out for Upcoming Stock Splits in January 2024

The new year has barely begun, but the stock market is already serving up a feast of corporate actions.

Among them, one trend adding fuel to the fire is the flurry of stock splits.

Companies are ditching their oversized shares and serving up bite-sized slices in the form of stock splits.

From defence giants to business support services, companies are slicing their shares like never before.

A stock split is a decision by a company to divide its existing shares into a larger number of new shares. It doesn't change the overall value of the company, but it does make each share less expensive.

The prime intention of a stock split is to improve the liquidity in the stock and make it more affordable for investors.

For investors in the hunt for such corporations, here are five stocks to watch out for stock splits in January 2024.

#1 Cochin Shipyard

First on the list is Cochin Shipyard.

Cochin Shipyard is a government-owned company and India's largest public-sector shipyard by capacity.

Even though it is registered as a commercial shipyard, it derives most of its revenues from building and repairing defence ships.

It's not just a unique player to ride the potential in India's defence manufacturing space, but the company is towering strong performance in a challenging sector.

Cochin Shipyard's board has approved the sub-division of equity shares in the ratio of 2:1. It means that each stock will split into two equity shares.

Cochin Shipyard shares' face value is Rs 10. Once the split takes effect, the new face value of Cochin Shipyard shares would be Rs 5.

The record date for the stock split is 10 January 2024.

For the September 2023 quarter, its revenue grew by 48% to Rs 10.1 bn. The company reported a net profit of Rs 1.8 bn, a growth of 61% compared to the same period last year.

As indicated by the company's management, the upcoming two years show a robust pipeline of projects.

Looking ahead, the Shiplift system is slated for completion by June 2024, by the current timeline.

For more, check out the Cochin Shipyard company fact sheet and quarterly results.

#2 Franklin Industries

Second on the list is Franklin Industries.

Franklin Industries is presently working in two segments, one in the wholesale trading of agriculture commodities and the other in the wholesale trading of jewellery.

Franklin Industries, on 27 November 2023, approved a stock split in the proportion of 1:10.

This means one equity share of the company having a face value of Rs 10 each into ten equity shares of the company having a face value of Rs 1 each.

The record date for the stock split is 11 January 2024.

For the September 2023 quarter, its net sales came in at Rs 85.3 million (m), up 401% from Rs 17 m.

The net profit for the quarter came in at Rs 7.5 m, attributed to increased sales.

The company recently announced its strategic initiative to diversify its business operation into the domain of contract farming business.

The decision comes as part of its continuous efforts to enhance the company's performance and drive sustained growth.

Going forward, the company expects the strategic expansion to strengthen its market position.

For more details, see the Murad Properties & Projects company fact sheet and quarterly results.

#3 Kaushalya Infrastructure Development

Third on the list is Kaushalya Infrastructure Development.

Kaushalya Infrastructure Development Corporation is engaged in executing construction contracts relating to infrastructure, real estate developments, acquisition and development, and sale of land. The company is also engaged in operating hotels.

The company on 27 December 2023, approved the consolidation of the face value of equity shares of Rs 10 each to Rs 1,000 each.

This action, called a reverse stock split, aims to boost the company's perceived value and attract investors.

The company fixed the record date as Friday, 12 January 2024.

For the September 2023 quarter, the company reported a 9.6% YoY decline in net sales at Rs 0.3 m. It reported a net loss of Rs 0.7 m on the back of higher expenses.

Going forward, the company plans to optimise its costs to turn profitable and increase its market reach.

For more details, see the Kaushalya Infra Development company fact sheet and quarterly results.

#4 Trishakti Industries

Fourth on the list is Trishakti Industries.

Trishakti Industries provides infrastructure and oil & gas exploration services.

The company engages in multiple business sectors, including logistics and infrastructure, oil and gas, food-related items, and agency services.

On 15 November 2023, the company's board of directors approved a sub-division in the ratio of 1:5.

This means one equity share of the company having a face value of Rs 10 each into five equity shares, having a face value of Re 2 each.

Mittal Life Style has set 16 January 2024 as the record date to determine the eligibility of shareholders entitled to stock split.

For the September 2023 quarter, its net sales came in at Rs 364 m, up 1155% from Rs 29 m.

The net profit for the quarter came in at Rs 1 m, down 80%, attributed to increased expenses.

Recently, the company has announced a strategic joint venture with PT Tubular Services Indonesian to establish a seamless pipe plant for an estimated value of Rs 6 bn.

This collaboration aims to expand operations, introduce new products, and cater to the growing demand for high-quality pipes across various industries.

Going forward, the company plans to strengthen its market position and enhance global competitiveness.

For more details, see the Trishakti Elec. company fact sheet and quarterly results.

#5 Waaree Renewable Technologies

Last on the list is Waaree Renewables Technologies.

The company generates electricity using renewable energy sources. The company works in on-site solar projects and off-site solar projects.

The company board is to consider the proposal for a stock split of equity shares of the company in the upcoming board meeting to be held on Saturday, 20 January 2024.

In terms of financials, revenue increased by 24% yearly, from Rs 1.2 bn in Q2FY23 to Rs 1.5 bn in Q2FY24. Similarly, net profit increased 125%, from Rs 80 m to Rs 180 m.

Apart from this, the company has successfully executed orders of more than 264.6 MWp in H1FY24 while receiving O&M Revenue of Rs. 51.5 m.

The company's marquee clients include Reliance Industries, Aditya Birla Group, NTPC, Cello, L&T, and Jindal Power.

The stock has been buzzing since last week, scaling greater highs after the parent company, Waaree Energies, filed documents for an initial public offering.

Waaree Energies submitted a draft red herring prospectus to the Securities and Exchange Board of India (SEBI) for the IPO, which comprises a new issuance of shares valued at Rs 30 bn.

For more details, see the Waaree Renewable Tech company fact sheet and quarterly results

Should You Invest in Stocks Undergoing Stock Splits?

Stock splits can improve liquidity and make shares more affordable, potentially attracting more investors. They often signify that a company is confident about its future prospects.

Additionally, stock splits can create a psychological boost, making investors feel like they are getting more for their investment.

However, there are drawbacks too. The most critical one being that a stock split doesn't change the company's intrinsic value. It's essentially a cosmetic change to the stock's price and number of shares.

Also, stock splits can lead to increased trading activity and short-term volatility, which might not align with a long-term investment strategy.

Therefore, while stock splits can be appealing, it's crucial to analyse the company's fundamentals, market conditions, and your own financial goals before making an investment decision.

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...