HDFC Mutual Fund Backed Small Cap Stock Declares Rs 6/Share Dividend: Buy?

An Indian-based worldwide manufacturer of designed systems and solutions, Uniparts India is a small-cap company in the engineering industry. With operations out of 8 locations across 3 countries, the group is a prominent provider of systems and components for the off-highway sector, with its products reaching over 25 nations globally. According to BSE records, Hdfc Mutual Fund - Hdfc Childrens Gift Fund acquired a 1.73% stake in Uniparts India in Q3FY24.

Uniparts India Dividend

The Board of Directors "have interalia approved declaration of second interim dividend for FY 2023-24 of Rs. 6 per equity share of face value of Rs. 10 each i.e., 60% on the Equity Share Capital of the Company and fixed February 21, 2024, as the Record Date for determining the shareholders who will be entitled to the said dividend. The interim dividend shall be paid to the eligible shareholders within 30 days from the date of declaration," said Uniparts India in a stock exchange filing.

Uniparts India Financials

The company reported a revenue from operations of Rs 259.2 Cr in the quarter ended 31st December 2023 down by 21.7% YoY from Rs 331.20 Cr in the year-ago quarter.

The company's EBITDA stood at Rs 44.40 Cr in Q3FY24 down by 48.1% YoY from Rs 85.50 Cr in Q3FY23.

Uniparts India said its net profit reached Rs 26 Cr during the quarter under review, down by 53.9% YoY from Rs 56.30 Cr in the same quarter of the previous fiscal.

Uniparts India Share Price Target

Deven Mehata - Equity Research Analyst at Choice Broking said UNIPARTS is currently trading at Rs 549. The stock is exhibiting a sideways trend within the range of Rs 500 to Rs 600, with immediate support levels identified at Rs 540 and Rs 500. A prudent strategy would be to consider buying on dips if a reversal is observed from these support levels.

The overall trend of the stock remains sideways, supported by a consistent pattern of equal highs and equal lows on the daily chart. Additionally, lower trading volumes indicate a clear indication of a sideways trend. If the price manages to close above the Rs 600 level, there is potential for a new all-time high, with a short-term target set at Rs 720 and above.

The Relative Strength Index (RSI) is currently trading flat at 44, suggesting that the stock is still in a sideways phase. The stock is presently trading below the 20-day exponential moving average (EMA), indicating a slight weakness.

Immediate hurdles on the upside are identified at Rs 600 and Rs 640. Investors are advised to hold their long positions with a trailing stop-loss (SL) set at Rs 500. Considering potential retracements in the stock price, it is recommended to contemplate buying on dips.

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.