BSE 500 Stock: 1st Ever 1:5 Stock Split; Buy/Hold The Stock By Record Date 5th September?

Over 400 KFC, Pizza Hut, and Taco Bell outlets are run by Sapphire Foods, one of Yum! Brands Inc.'s largest franchisees in the subcontinent, throughout India, Sri Lanka, and the Maldives. With a market valuation of Rs 10,169.38 Cr, Sapphire Foods India's shares closed the day on Wednesday 1.34% higher at Rs 1594.80 apiece. The BSE 500 stock has a set record date for a 1:5 stock split, which is intended to increase the equity shares of the company's liquidity in the capital markets by increasing the number of shareholders and lowering the price for retail investors.

Sapphire Foods Stock Split

"Pursuant to Regulation 42 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, this is to inform you that the Company has fixed Thursday, 5th September 2024 as the "Record Date" for determining entitlement of Equity Shareholders for the purpose of subdivision/ split of existing Equity Shares of the Company from 1 (One) equity share having face value of Rs. 10/- (Rupees Ten) each fully paid up, into 5 (Five) equity shares having face value of Rs. 2/- (Rupees Two) each fully paid-up, ranking pari-passu in all respects, which was approved by the Equity Shareholders at 15th Annual General Meeting of the Company held on 9th August 2024," said the company in a stock exchange filing.

Sapphire Foods Q1 Results

Sapphire Foods India's net profit for the quarter ended June 2024 was Rs 8.52 crore, down from Rs 24.94 crore for the quarter ended June 2023, a 65.84% drop. Sales for the quarter ended June 2024 climbed 9.77% to Rs 718.29 crore from Rs 654.38 crore in the corresponding quarter ending June 2023.

Sapphire Foods Share Price Target

"A quick snowflake analysis of Sapphire Foods India Ltd. suggests the growth potential for this stock is reasonable but low. While the company's earnings are projected to grow at 42.08% a year, there are several concerns. For instance, the company's interest payments are not covered by earnings, and notable insider selling was seen over the last three months, suggesting a lack of confidence. The company's profit margins have also slumped significantly from the previous year's 9.3% to this year's 1.4%. SAPPHIRE's stock is currently valued at around 65.4% above its worth, making it highly overvalued. The company has also underperformed compared to the broader hospitality sector. However, the stock's RSI readings of 46 on the daily, 54 on the weekly, and 59 on the monthly timeframes suggest the stock could become lucrative for an entry following more dips. Those willing to explore the dip should consider the buying range of Rs. 1450-1530 for a target price of Rs. 1650-2000. I recommend holding it for 2-6 months and setting a stop loss at Rs. 1330 to mitigate potential losses," said V.L.A. Ambala, a Research Analyst (SEBI Registered), Co-founder - Stock Market Today (SMT).

Disclaimer

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