Why Salasar Techno Engineering Share Price is Falling

It's a known fact that stocks become more volatile after corporate actions like stock splits or bonus shares.

This can be due to changes in investor perception, increased liquidity, adjustment periods, technical factors, and market psychology.

These factors lead to heightened trading activity and fluctuations in the stock's price.

One such company that has seen a lot of volatility in recent session is smallcap stock Salasar Techno Engineering.

In the past five days, Salasar Techno shares are down around 19%.

The stock is currently locked in the 5% lower circuit band at Rs 25 per share.

Salasar Techno Engineering Bonus Shares

In December 2023, the company had announced bonus shares in a 4:1 ratio.

It meant that eligible shareholders would get four bonus shares with a face value of Re 1 each for every share held as on the record date.

Along with declaring its Q3 results earlier this month, the company allotted bonus shares to the eligible shareholders.

Subsequently, the stock price was divided to give the bonus shares effect.

Now, for the next couple of days after turning ex-bonus, the stock was locked in the 5% upper circuit band. But it reversed course in the next few sessions and the stock has consecutively fallen 5% for the past few days.

Since the stock is now relatively low-priced, it is experiencing added volatility owing to high liquidity.

What's this we hear about Company approaching Finfluencers?

Agreed, the added volatility in recent sessions is due to Salasar turning ex-bonus.

But what caught our attention is a user on X (formerly Twitter) pointing out that the company is paying money to finfluencers for promoting their stock.

We don't know for sure whether this is verified or whether it's just a rumour... but we know one thing for sure, investors don't take these things lightly.

Just last year, we saw the market regulator cracking down on finfluencers promoting stocks.

This stringent crack down comes after SEBI noticed finfluencers actively recruited by companies or other large investors to pump-and-dump stocks.

We'll see more developments unfold in the coming days.

What Next for Salasar Techno Engineering?

Reacting to the information provided on social media, the company was quick enough to inform exchanges that the information is false.

• This has come to notice of the company that certain videos and chats being circulated on various social media platforms over the last few days by some miscreants spreading false information and malicious rumors, campaigns with malaise intentions to create a narrative with ulterior motives.
  
  We would like to clarify that the company does not have any role in such things, and no way the company, its management, office bearers are directly/indirectly connected/involved.

Keeping aside the recent drama, the company does have strong growth levers in place.

It recently raised funds from its existing lenders including SBI, HDFC Bank, Yes Bank, and IndusInd Bank.

Salasar also bagged an EPC contract worth Rs 3.6 billion (bn) from Tamil Nadu Generation and Distribution corporation (TANGEDCO).

Under the contract, the company is entrusted with the supply, erection, and installation of feeder segregation, high-voltage distribution system, separation of double distribution transformer, and augmentation of 33KV lines.

The company is a key player in the railways and power sectors having executed contracts for transmission lines, sub-stations and distribution lines awarded by various prestigious power sector PSUs and Indian railways.

It has taken the order book to new highs and it's currently in advance stages of completing additional contracts worth Rs 25 bn from Indian Railways and various power sector PSUs.

The company generally receives regular monthly orders for telecom towers, with an approximate value of Rs 300 to 350 million.

Last week, the company posted good numbers for the quarter ended December 2023. It posted a 56% rise in net profit while revenues came in at Rs 3.1 bn compared to Rs 2.4 bn in the year ago period.

It remains to be seen how investors react to the Social Media information and whether the company is able to justify the same.

Stay tuned to this space for more.

How Salasar Techno Share Price has Performed Recently

In the past five days, the stock is down 19%.

Salasar Techno has a 52-week high of Rs 34 touched not long ago on 7 February 2024 and a 52-week low of Rs 7 touched on 28 March 2023.

In the past one year, its share price has gone up by 193%.

Here's a table comparing Salasar Techno with its peers -

Comparative Analysis

Company	Salasar	Elin Electronics	Uniparts	Everest Kanto
ROE (%)	11.8	6.7	27.1	7.9
ROCE (%)	14.2	9.9	33.1	10.4
Latest EPS (Rs)	0.3	2.3	31.3	10.8
TTM PE (x)	82.3	61.8	17.5	15.1
TTM Price to book (x)	7.5	1.5	2.7	1.7
Dividend yield (%)	0.4	0.7	2.6	0.4
Industry PE	50.1
Industry PB	5.6

Data Source: Ace Equity

Happy Investing.

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...