LIC-Backed FMCG Stock To Turn 250% Ex-Dividend Tomorrow 20th Nov: Buy?

Kaveri Seed Company, with a market capitalization of around Rs 3,348.32 Cr, is a small-cap company within the FMCG industry. Currently, Kaveri Seeds stands as the top agricultural enterprise in India, specialising in hybrid seeds. The company has announced an interim dividend of 250% for FY24, and it has set November 20, 2023, as the record date in order to determine the eligibility of the shareholders for the purpose of the above-mentioned dividend. As per the data available on BSE, the stock is going to trade ex-dividend on Monday.

Kaveri Seed Company Dividend

"The Board has approved the payment of Interim Dividend @ 250% i.e., Rs.5/- per Equity Share of Rs.2/- each on the profits of the Company for the Financial Year 2023-24 on the equity share capital of the company. The Interim Dividend shall be paid on or before 30th November 2023 to the equity shareholders of the Company whose names appear on the register of members of the Company or in the records of the Depositories as beneficial owners of the shares as on Monday the 20th November 2023 which is the Record Date fixed for the purpose of payment of an Interim Dividend for the Financial Year 2023-24," said Kaveri Seed Company in a stock exchange filing.

Kaveri Seed Company Q2 Results

The company reported revenue from operations of Rs 96.12 Cr for the quarter ended September 30, 2023 up by 13.77% YoY from Rs 84.49 Cr for the year-ago quarter. Its EBITDA stood at Rs 19.79 Cr in Q2FY24 up by 69.60% YoY from Rs 11.67 Cr in Q2FY23. EBITDA margin climbed by 678 basis points to 20.59% from 13.81% in Q2FY23. Its net profit stood at Rs 10.72 Cr during the quarter under review compared to Rs 2.72 Cr in the same quarter of FY23, registering a growth of 2.94 times.

Mr. G V Bhaskar Rao, Chairman & Managing Director said, "We are elated to announce our outstanding growth rates across key seed segments. Despite stable volumes in Rice and Cotton, our strategic approach has transformed better realizations into substantial revenue growth, fuelling a significant improvement in margins."

"The surge in global rice prices has propelled a remarkable 10.80% increase in our rice cultivation area, marking a pivotal moment for our company. We are not only witnessing unprecedented success in our vegetable business but also aggressively expanding our footprint in international markets. Our focus now extends to countries like Tanzania, Algeria, Ivory Coast, Thailand, the Middle East, and Bangladesh, strengthening our position as a global leader in the seed industry," he added.

Adding further he said, "I am also pleased to announce that the Board has recommended a 250% dividend, equivalent to Rs. 5 per equity share on a face value of Rs. 2 per equity share, reflecting our commitment to rewarding our shareholders for their trust and confidence in our company's growth journey."

Kaveri Seed Company Share Price Target

Deven Mehata-Equity Research Analyst at Choice Broking said, "KSCL, currently trading at 595 levels, is encountering a persistent resistance zone between 630-640 levels. This repetitive pattern suggests a challenge for the stock to break through this range. On the downside, the stock holds a strong support level around 580, which is crucial for maintaining its current stability. However, if this support is breached, it may lead to a further downside move, with a potential target of 562, aligning with the 200-Day Exponential Moving Average (EMA)."

"Investors who entered positions at lower levels are advised to consider booking profits in the stock, especially given the on-going resistance and the potential downside risk if the support at 580 is broken. For those who entered positions at higher levels, it's crucial to implement a strict stop-loss strategy to manage risk. Setting a stop loss at 580 levels, just below the strong support, can help protect against further downside," the analyst further added.

Kaveri Seed Company Shareholding Pattern

For Q2FY24, the FMCG company booked promoters shareholding of 59.90%, FIIs stake of 16.29%, DIIs stake of 6.76%, public stake of 15.58% and others stake of 1.46%. As per the shareholding pattern of Kaveri Seed Company for the July to September 2023 quarter, insurance giant LIC held 27,40,463 fully paid-up equity shares or 4.90% stake in the company.

Disclaimer

The recommendations made above are by market analysts and are not advised by either the author, nor Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.