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  • Apr 2, 2024 - Top 5 Stocks to Watch Out for Bonus Shares and Stock Splits in April 2024

Top 5 Stocks to Watch Out for Bonus Shares and Stock Splits in April 2024

Apr 2, 2024

Top 5 Stocks to Watch Out for Bonus Shares and Stock Splits in April 2024

The curtain falls on another Indian financial year, but this time, the drama unfolds off-stage.

This time around, the spotlight isn't solely fixated on the traditional bottom-line figures. Instead, the stage is set for corporate actions, where bonus shares and stock splits take centre stage.

Bonus shares and stock splits are exciting events for investors because they have a material impact on the company's stock price.

Both mechanisms serve as potent tools to bolster shareholder confidence, stimulate trading activity, and maintain an equitable distribution of wealth.

Shares of the companies declaring bonus shares or stock splits continue to remain in focus for at least a month after their corporate action activity.

For investors in search of such opportunities, here are four stocks to watch out for.

#1 Sunrise Efficient Marketing

First on the list is Sunrise Efficient Marketing.

Sunrise Efficient Marketing, previously known as Sunrise Marketing and Services, came into existence in 2002.

The company expanded its infrastructure, added new business lines, and collaborated with industry leaders.

The board has recommended the issue of bonus equity shares in the ratio 1:2, i.e., one bonus equity share of Rs 10 each for every two fully paid-up equity shares.

The record date for the same is 3 April 2024.

Before this, Sunrise Efficient Marketing declared one bonus issue on 8 September 2023. Its last bonus issue was declared in the proportion of 1:1 with an ex-bonus date fixed as 8 September 2023.

Earlier last year, on 4 December 2023, the company achieved another milestone order of Rs 85 million in an entirely new business of providing solutions for graphic designing and rendering along with all the required hardware.

According to half-yearly results, the net sales increased by 37.8% To Rs 49.6 million (m), and the net profit skyrocketed to Rs 3.4 m, up 142.8%.

Going forward, the company plans to launch new products.

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For more details, see the Sunrise Efficient company fact sheet and quarterly results.

#2 Bodhi Tree Multimedia

Second on the list is Bodhi Tree Multimedia.

It is one of the top companies in India for producing entertainment content. Since its inception, it has generated a strong lineup of over thirty shows for the majority of major broadcasters and OTT platforms.

The company will split its stock in the ratio of 1:10. Accordingly, the ratio leads to one share of the company having a face value of Rs 10 to be divided into ten shares of the company having a face value of Re 1 each.

The company has set 5 April 2024 as the record date for the sub-division of the equity shares.

The company's net income for the December 2023 quarter was Rs 129.1 m on a consolidated basis, up from Rs 112 m in the same quarter of 2022.

Going forward the company plans to increase its revenue.

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For more details, see the Bodhi Tree Multimedia company fact sheet and quarterly results

#3 Cupid

Third on the list is Cupid.

Cupid is India's premier manufacturer of male and female condoms, personal lubricants, and IVD kits.

The company announced a 1:10 stock split, meaning a sub-division of one equity share of the face value of Rs 101 each, fully paid up into ten equity shares of the face value of Rs 1 each, fully paid up.

Additionally, Cupid announced a 1:1 bonus issue, entitling shareholders to one bonus share with a face value of Rs 1 each, fully paid up, for every existing equity share with a face value of Rs 1 each, fully paid up.

The company has scheduled the record date for the bonus issue and split on 4 April 2024.

It experienced a slight decline in total revenue by 4.1% year-over-year to Rs 400.5 million for the December 2023 quarter, Cupid experienced a net profit decrease of 11.7% to Rs 88.6 million during the same period. In December 2023, Cupid made headlines with a strategic land acquisition for boosting its production capacity by 1.5 times the current output.

Moving forward, Cupid intends to concentrate on leveraging its existing product portfolio for sustained growth.

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

#4 Titan Intech

Fourth on the list is Titan Intech.

It is an information technology (IT) based services products and electrical solutions and services company. It offers multi-discipline design, engineering, supply, installation, commissioning, and project management for electrical systems among others.

The company received the board of directors' approval for the issuance of bonus shares in the ratio of 3:5.

It means that the company will issue three bonus shares for every five shares held by them.

Further, the company has 8.9 m outstanding convertible warrants. The said warrant holders shall also be eligible for the bonus issue of equity shares post-conversion of such warrants into equity shares.

For the December 2023 quarter, the company reported a 386.4% YoY rise in revenue at Rs 122.6 m. While the net profit for the quarter came in at Rs 15.4 m, up 227.5%.

The company is looking forward to international expansion.

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For more details, see the Indovation Tech company fact sheet and quarterly results.

#5 GM Breweries

Last on the list is GM Breweries.

The company manufactures and markets alcoholic beverages, country liquor (CL), and Indian-made foreign liquor (IMFL).

It has a monopoly in country liquor in Mumbai with a sizable market share. Some of its brands include GM Santra, GM Doctor, GM Limbu Punch, and GM Black.

It can produce and process 140 million (m) of country liquor, which is about 50,000 cases per day.

The company informed the exchanges that its board would meet on 4 April to consider the proposal of issuing bonus shares to its shareholders.

The record date for the bonus issue, if approved, is yet to be determined.

After a gap of six years, this company will approve the issue of bonus shares. Previously, the company issued bonus shares in a ratio of 1:4 in 2018, 2016, and 2014.

The company's revenue witnessed a marginal growth of 2% to Rs 1.6 bn in the December 2023 quarter.

The manufacturer and marketer of alcoholic beverages reported a 13% drop in net profit to Rs 230 m for the December 2023 (Q3FY24) quarter.

Going forward, the company's strong presence in the country liquor segment is expected to drive its revenue and profit.

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To know more, check out GM Breweries' financial factsheet and latest quarterly results.

Should You Invest in Stocks Declaring Bonus Shares and Stock Splits?

Investing in stocks that announce bonus shares and stock splits can be an appealing option for some investors.

These actions can increase liquidity, generate positive market sentiment, and potentially make the stock more affordable for a wider range of investors.

However, it does not guarantee profitability in all cases. One drawback to consider is the potential dilution of earnings per share if the company's profits do not increase proportionally.

Therefore, it's important to consider the company's fundamentals, such as financial performance and growth prospects, before making investment decisions solely based on bonus shares and stock splits.

Dilution concerns and individual circumstances should also be considered.

For the companies with long history of issuing bonus shares, check out 5 Indian companies which have consistently declared bonus shares.

Investment in securities market are subject to market risks. Read all the related documents carefully before investing

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If you're an investor, then you simply cannot ignore this opportunity.

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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...

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