3 Stocks to Watch out for Bonus Shares and Stock Splits in February 2023

Investors had a rough year in 2022. The bear market affected all major indices, marking the worst performance since 2008.

Despite growing pessimism and double-digit percentage drops across most sectors and businesses in 2022, investors have found a silver lining in stock splits and bonus issues.

More than 140 companies declared bonus shares in 2022 to attract retail investors.

With the market continuing to stumble in 2023, some companies have opted to maintain this rewarding trend.

Here are three stocks that will trade ex-bonus and ex-split in February 2023.

#1 Servotech Power Systems

First on our list is the Servotech Power Systems.

Servotech Power systems is a smallcap electric equipment manufacturing company. It is a top producer of solar products, medical equipment, and energy solutions.

The company offers lighting and solar products such as fans, solar home lighting systems, bulbs, and panels.

On 7 December 2022, the board decided to split the company's shares in a 1:5 ratio. This means that a fully paid-up equity share with a face value of Rs 10 will be split into five fully paid-up equity shares of Rs 2 each.

The board has fixed 3 February 2023 as the record date to ascertain the eligibility of shareholders for sub-division/split.

Servotech Power Systems reported a 101.1% YoY jump in revenue to Rs 832.7 m for the December 2022 quarter. The net profit for the same period came in 263.1% YoY higher at Rs 38.6 m.

This jump was due to a robust market strategy, expanded footprint, and advances on the channel front.

Servotech has also declared an interim dividend of Rs 0.25 per share for the financial year 2023. The record date for the same is 18 February 2023.

To provide customers with more smart lifestyle solutions, it is working on increasing innovation efforts and refining its go-to-market strategy for the coming quarters.

Since its listing on exchanges in September 2021, the share has rallied over 737%. While over the past year, the share price has surged by 95%.

For more details, see the Servotech Power Systems company fact sheet and quarterly results.

#2 Shreeji Translogistics

Second, on the list is Shreeji Translogistics.

The company is one of India's prominent integrators of logistics solutions.

It provides an extensive spectrum of logistical requirements, from export-import container transportation to bond trucking transportation.

In terms of freight management, logistical solutions, and warehouse services, the organisation has more than 40 years of expertise.

On 15 November 2022, the board decided to split the shares in a ratio of 1:5. This means each equity share with a face value of Rs 10 will be divided into five equity shares with a face value of Rs 2.

The board has fixed 15 February 2023 as the record date for the split.

For the September 2022 quarter, the company's revenue rose by 11.8% YoY to Rs 493.4 m. Net profit stood at Rs 29 m, down 6% YoY. This decline was due to an increase in salary expenses and the increased expenditure of purchased traded goods.

On 24 January 2023, it announced the expansion of its services in three new locations, namely Mundra, Kandla and Gandhidham. It is expected to serve their customers better in the region and provide them with high-quality logistics services.

For the coming quarter, it is focusing on more such expansions.

For more details, see the Shreeji Translogistics company fact sheet and quarterly results.

#3 MK Proteins

Last on the list is MK Proteins.

MK Proteins owns and operates an edible oil production plant in India.

It is engaged in manufacturing refined vegetable oils, with a refining capacity of 250 tons per day. The company refines rice bran, sunflower, cotton seed, soya bean, palm, and canola oil.

The board of directors on 1 January 2023 approved the proposal to recommend the issue of bonus shares in the ratio of 2:1. This means two bonus shares for every one existing share.

The board has fixed 3 February 2023 as the record date to determine the eligibility of shareholders.

For the September 2022 quarter, it reported revenue of Rs 1.4 bn. The net profit for the same period came in at Rs 37.3 m.

The company's shares have given multibagger returns of over 1300% in the past year. The company was a beneficiary of the shortage of edible oil in the international market after the Russian invasion of Ukraine in 2021. Oil prices rose which led to higher profits for the company driving the share price up.

For the coming year, it is planning to increase its production capacity.

For more details, see the MK Proteins company fact sheet and quarterly results.

Should you invest in stocks announcing bonus shares and stock splits?

Bonus issues and stock splits have a similar impact on a company's shares. Without significantly altering the company's fundamentals, both lead to an increase in shares.

But it is important to consider that while stock splits and bonus shares increase the total number of shares, their market value also decreases. However, this should not be interpreted as a drawback of stock splits and bonuses. It may result in long-term advantages.

The increase in shares increase the trading volume of the stock.

The more demand there is, the more the price appreciation and the quicker it occurs.

While these may not immediately bring value, they have a promising future.

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...