1:5 Stock Split: Penny Stock To Trade Ex-Split This Week; Turns Rs 20,00 To Rs 1 Lakh In 6 Months; Buy More?

Penny stock, Trishakti Industries is set to trade ex-split in the trading week from January 15-20 for a shares sub-division in the ratio of 1:5. Ahead of the stock split, the penny stock in the NBFC sector has touched a new 52-week high, frozen at its 2% upper circuits, and rose by a massive 495% from its 1-year low. Huge buying has been witnessed in this stock.

On BSE, Trishakti's share ended at Rs 179.05 apiece, which is its 2% upper circuit and also a new 52-week high on Friday, Its market cap is at Rs 53.19 crore. This means that there were several buyers in Trishakti on January 12th but no sellers.

The stock has fixed Tuesday, January 16, 2023, as the record date to identify eligible shareholders for the stock split ratio.

The ratio of 1:5 means that the company will sub-divide its 1 equity share having a face value of Rs 10 each with Rs 2 equity per share.

On the stock price, VLA Ambala of SMT viewed it as bullish but also recommended keeping exposure limited because it is trading in an overbought zone. She suggested buying in the range of Rs 160 to 175, while the stock is expected to average between Rs 140 to 160. She recommended a target price of Rs 200 to 430 with a stop loss of Rs 130 for a holding time of 2 weeks to six months.

Listed companies declare a stock split of already owned shares into much smaller shares. This is done to improve liquidity by breaking the shares into smaller sizes. The face value of the shares reduces in proportion to the split ratio, however, there is no impact on the company's share capital and reserves. Although the price value of a stock reduces in a stock split, the number of shares held rises in the investors' portfolio of that specific stock.

With the latest bull ride, Trishakti is up by 495.44% from its 52-week low of Rs 30.07 apiece. In six a six-month span, the stock zoomed by over 440% on BSE. While in 5 years, the upside is humungous by 842.37%.

This means that an investment of Rs 20,000 in Trishakti six months ago, has now taken investors' wealth to Rs 1,08,000 -- which will be a gain of Rs 88,000 in this period.

AR Ramachandran from Tips2trades said, "Trishakti Industries is bullish but very overbought on the Daily charts with next resistance at 193.4. Investors should book profits at current levels as Daily close below support of 172 could lead to a target of 150 in the near term."

Incorporated in 1985, Trishakti is an infrastructure & Oil & Gas exploration service providing Services to well-known companies including Oil & Natural Gas Corporation Limited, the biggest oil & gas exploration company in India and also other PSU, Private and Multi-National (MNCs) as clients. Trishakti Electronics & Industries Ltd has a professional team comprising of well-experienced Engineers, Oil & Gas Exploration Experts having expertise background in oil exploration and Commercial Executives who have an in-depth knowledge of the local market for the company's core business activity.

Besides technical knowledge, they have in-depth knowledge about the types of requirements of the local oil & exploration industry as well as good business relations with clients organisations. Trishakti has acquired one acre of land at IT Park, Bantala, Kolkata to set up its own IT/ITes unit. This unit is inside the SEZ (Special Economic Zone) of the IT park industrial zone. IT and ITes units enjoy special benefits from the Government such as free electricity, subsidized electricity over some time, no customs duty no VAT, no excise duty, no service taxes etc.

As per ICICI Direct, Trishakti's ROCE and ROE are at 6.61% and 5.01%. While as per Trendlyne, the company's Debt to Equity Ratio of 0.05 is less than 1 and healthy, which implies that its assets are financed mainly through equity. Also, its Interest Coverage Ratio is 12.37, higher than 1.5, meaning that it can meet its interest payments comfortably with its earnings (EBIT).

Further, Trendlyne showed that Trishakti Industries' weekly average delivery volume is 100%, while it is trading above 8 out of 8 SMAs, and 7 out of 9 Oscillators in bullish zones.

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.