7 Stocks to Watch Out for Bonus Shares and Stock Splits in August 2024

The advantages of investment in the stock markets are plentiful. Some fail to venture into stocks as investments as the fear of failure in the markets outweighs potential gains.

There is risk, no doubt. It is true when the stakes for earning rewards are high.

However, if investors do their research quite diligently, there are more rewards from owning stocks to be had, rather than disappointments.

One of the reasons that retail investors like is the prospect of stock bonus and stock splits.

In both cases, the number of shares with the shareholders is enhanced, and the share price reduces proportionately.

Hence, regarding the wealth effect, the impact is immaterial as the increase in the number of shares and the fall in price ex-bonus or ex-split tend to compensate for each other.

In today's article, we will look at five companies to watch out for in August 2024.

#1 Balmer Lawrie Investment

First on the list is Balmer Lawrie Investment.

Balmer Lawrie Investments Limited is primarily an investment holding company. Its core business involves holding equity shares in its subsidiary, Balmer Lawrie & Co.

On 28 May the company approved a stock split in the ratio of 10:1. This means that for every one share currently held, shareholders will receive ten shares.

The record date for the same is 9 August 2024.

For the March 2024 quarter, the company reported a 5.2% YoY decline in revenue to Rs 5.7 bn. Meanwhile, the net profit for the quarter jumped 65.3% to Rs 737.7 m.

Going forward, the company might pursue strategic investments or divestitures to align with its growth objectives and optimise its portfolio.

For more details, see the Balmer Law Invest company fact sheet and quarterly results.

#2 Kapston Services

Next on the list is Kapston Services.

Kapston Services is an Indian company specialising in integrated facilities management.

Their core offerings include manpower solutions (general and IT staffing), security services, and comprehensive facility management services.

The company on 29 May 2024, approved stock split in the ratio of 2:1. This means each equity share with a face value of Rs 10 will be split into 2 equity shares with a face value of Rs 5 each.

The record date for the same is 9 August 2024.

As per the quarterly results, in the fourth quarter of FY24, Kapston Services Ltd recorded a revenue of Rs 1.4 bn.

The net profit came in at Rs 27.6 m.

As of now, there is no publicly available, detailed roadmap outlining Kapston Services' specific future plans.

However, the company might introduce new services, such as green building management, waste management, or energy efficiency consulting.

For more details, see the Kapston Facilities Management company fact sheet and quarterly results.

#3 Cellecor Gadgets

Next on the list is Cellecor Gadgets.

Cellecor Gadgets, incorporated in 2020, is engaged in the procurement, branding, and distribution of televisions, mobile phones, smart wearables, mobile accessories, smart watches, and neckbands.

It has three business verticals - entertainment and communication, peripherals, and modern accessories.

On 26 June 2024, Cellecor Gadgets made headlines as its board of directors approved a proposal for a stock split. The board has decided on a 10:1 stock split ratio, with the record date set for 9 August 2024.

Apart from this, the company recently announced to the stock market that it has partnered with BLS E-Services to expand its distribution network. Through this collaboration, the company plans to sell its smart TVs, phones, and smartphones.

On the financial ground, the company reported an 89.3% YoY rise in revenue to Rs 5 bn. Meanwhile, the net profit for the year rose 99.4% to Rs 1,60.9 m.

Going forward, the company aims to achieve a staggering Rs 10 bn in sales by 2025.

Cellecor plans to diversify its product range by introducing more TWS earbuds, wearables, and smart TVs in both budget and premium segments.

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

#4 Filatex Fashion

Next on the list is Filatex Fashion.

Filatex Fashions Limited is one of India's oldest players in knitwear & apparel manufacturing. The company manufactures products ranging from socks, tights, wristbands, headbands, compression sleeves, knee braces, infant caps, and more.

In a board meeting scheduled on 7 June, Filatex Fashions announced a stock sub-division in the ratio of 1:5. This means that existing 1 equity share of the face value of Rs 5 each into 5 equity shares of Re each.

The reason behind the stock split is to enhance the liquidity in the capital market and to widen the shareholder base.

The record date for the same is 9 August 2024.

For FY24, the company reported a 3.4% YoY rise in revenue to Rs 1.7 bn. Meanwhile, its net profit fell 25.9% to Rs 88.2 m.

Going forward, the company is investing Rs 3 bn in the next 18 months to increase production capacity by installing 500 new machines.

This will enable the company to meet the rising demand for the existing product range.

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

#5 Rushil Decor

Next on the list is Rushil Decor.

Rushil Decor offers a wide product portfolio of laminates, MDF boards, HDFWR (high-density fiber water resistant) boards, pre-laminated decorative MDF boards and PVC boards with a fully supported robust after-sales service network under the VIR brand.

Rushil Decor has announced its first-ever stock split in the ratio of 1:10.

1 equity share having a face value of Rs 10 will be sub-divided into 10 equity shares having face value of Re 1.

The company proposed to incorporate Rushil Fasteners Private Limited or any other name as may be approved by the Central Registration Centre, Ministry of Corporate Affairs.

The proposed company to be incorporated would be in the business of fasteners and other allied items.

The company reported a 9.8% YoY rise in income to Rs 2.4 bn. However, the net profit witnessed a 33.6% YoY decline to Rs 90 m.

The company plans to introduce new products like decorative and flexible plywood to complement its existing MDF and laminate offerings.

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

#6 Maruti Infrastructure

Next on the list is Maruti Infrastructure.

Founded in December 1994, this prominent firm in Ahmedabad specialises in providing professional construction and property management services for residential and commercial properties. It is the infrastructure and construction of EWS housing and urban infra projects.

The company on 25 July 2024 announced 1:2 bonus shares and 1:5 stock split.

This involves the subdivision of each existing fully paid equity share with a face value of Rs 10 into five equity shares with a face value of Rs 2 each.

Additionally, for every two fully paid equity shares of Rs 2 each held post-subdivision, shareholders will receive one new bonus equity share of Rs 2.

The record date for these changes is 9 August 2024.

In terms of financial performance, the company's sales declined by 10.9% to Rs 119.7 m in Q4 FY24 compared to the previous year.

It reported a net loss of Rs 10.1 m for the quarter ended 31 March 2024, in contrast to a net profit of Rs 7.8 m in the same period the previous year.

Going forward, the company plans to increase its revenue.

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

#7 VST Industries

Last on the list is VST Industries.

VST Industries is a prominent Indian manufacturer of cigarettes and tobacco products. Operating under various brand names such as Total, Charms, Charminar, Editions, Special, and Moments, VST Industries is the second-largest cigarette manufacturer in India.

Originally known as the Vazir Sultan Tobacco Company, it was once affiliated with the British American Tobacco Group from the United Kingdom.

VST Industries became an independent entity and was officially registered as VST Industries Ltd in 1983.

The company on 25 July 2024 announced a bonus issue for the first time in ratio of 10:1.

This means ten new bonus equity shares of Rs 10 each for every one existing equity share of Rs 10 each fully paid up.

The board has fixed 30 August 2024 as the record date.

For the June 2024 quarter, the company reported a 3.5% YoY decline in revenue to Rs 3.2 bn. Meanwhile, the net profit fell 36% to Rs 536 m.

Going forward, the company plans to increase its profitability.

For more details, see the VST Industries company fact sheet and 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. One drawback to consider is the potential dilution of earnings per share if the company's profits do not increase.

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.

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...