Record High Payout of Rs 95 Dividend: Payable By 19th July; What Should Fresh Investors Do?

The main business of Swaraj Engines Limited (SEL) is the supply of engines to Mahindra & Mahindra Ltd.'s (M&M) Swaraj Division. SEL produces and distributes diesel engines with displacements ranging from 22 HP to more than 65 HP. The small-cap stock will be the subject of attention next week as it will trade ex-dividend on June 28th, commemorating its highest dividend payout of Rs 95 per share ever. So, should new investors buy the stock in order to be eligible for the dividend? Let's look at analyst suggestions first.

Swaraj Engines Dividend

"The shareholders may note that the Board of Directors at their meeting. held on 18th April, 2024 has recommended a dividend of Rs. 95.00 per share. Pursuant to Section 91 of the Companies Act, 2013, and Regulation 42 of SEBI Listing Regulations, the Register of Members and share transfer books will remain closed from Saturday, 29th June, 2024 to Friday, 5 July, 2024 (both days inclusive). The dividend, subject to the approval of the Members, will be paid on or after 19th July, 2024 electronically through online transfer modes to the shareholders who have updated their bank account details," said the company in a statement.

"The Register of Members and Share Transfer Books of the Company will remain closed from Saturday, 29th June, 2024 to Friday, 5th July, 2024 (both days inclusive) for the purpose of determining the Members eligible to receive the dividend, if declared by the shareholders at the ensuing Annual General Meeting ("AGM") scheduled to be held on Thursday, 18th July, 2024. The dividend, if declared at the AGM, will be paid/dispatched by the Company in permitted modes after Thursday, 18th July, 2024 within the stipulated timelines," Swaraj Engines said in a stock exchange filing.

Swaraj Engines FY24 Performance Highlights

In the quarter that ended in March 2024, Swaraj Engines' net profit climbed by 0.63% to Rs 35.18 crore, compared to Rs 34.96 crore in the quarter that ended in March 2023. In the quarter that ended in March 2024, sales fell 2.45% to Rs 350.96 crore from Rs 359.79 crore in the quarter that ended in March 2023. EBITDA dropped by 0.81% from Rs. 51.68 crore in Q4FY23 to Rs. 51.26 crore in Q4FY24.

Engine sales for the company in Q4 of FY24 were 35,344, up from 34,841 units sold in the same period the previous year. With net operating revenue of Rs. 350.96 crores as opposed to Rs. 359.79 crores in the same quarter of the previous year, the company reported a PBIT of Rs. 44.10 crores as opposed to Rs. 43.42 crores in Q4FY23, along with a 50 basis point gain in the margin.

In FY24, 1,38,761 engines were sold, compared to 1,37,005 units sold in the previous fiscal year. In comparison to the previous year's Rs. 1421.82 crores, the net operating revenue for FY24 was Rs. 1419.24 crores. Although the year's profit before tax was Rs. 184.97 crore, net profit for FY24 was Rs. 137.87 crore, up 3.2% from FY23's Rs. 133.61 crore, which was the highest profit made during any financial year.

Swaraj Engines Share Price Target

KKunal V Parar, VP of Technical Research and Algo at Choice Broking said, "The stock has recently broken out from a Rounding Bottom formation on its monthly chart, signalling a bullish trend. This breakout has been accompanied by above-average trading volumes, indicating strong buying interest. Furthermore, on the hourly chart, the stock is consistently trading within an upward channel, suggesting continued upward momentum. The daily MACD momentum indicator is also confirming the bullish sentiment, as it remains above its zero line."

"Given these technical indicators, we anticipate further upside potential in the stock, with a potential target range between 3300 and 3450. On the downside, support is seen around 2750, reinforcing the bullish outlook. In summary, based on the technical structure observed, the stock appears poised for continued gains, supported by multiple bullish signals across different timeframes," the analyst added.

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.