Shares of Tembo Global Industries Ltd. are in focus after the company’s board approved a 1:10 stock split, subject to shareholder approval.
The small-cap company had a market capitalization of Rs. 1,059 crore. The stock was trading around Rs. 571, about 31 percent below its 52-week high of Rs. 837. It trades at a P/E ratio of 11.6, compared with the industry average of 21.8.
1:10 stock split approved
Under the proposal, every equity share with a face value of Rs. 10 will be split into 10 shares with a face value of Re. 1 each.
According to the company, the move is intended to:
- Improve liquidity in the stock
- Make shares more affordable
- Increase participation from retail investors
The proposal will require approval from shareholders at the upcoming extraordinary general meeting (EGM).
The company said the record date for the stock split will be announced after the necessary approvals are obtained.
Board approves warrant conversion
The board also approved the conversion of 4,05,000 convertible warrants into an equal number of equity shares with a face value of Rs. 10 each.
Following the allotment:
- Paid-up equity capital increased from Rs. 18.54 crore to Rs. 18.95 crore
- The new shares will rank pari passu with existing equity shares
Management’s view
Management said the stock split is aimed at improving market accessibility and trading activity over the long term.
It added that the conversion of warrants reflects investor confidence in the company’s growth plans and strengthens its capital base.
Business overview
Tembo Global Industries operates across four business segments:
- Engineering Solutions and EPC
- Defence Solutions
- Solar Power
- Textiles
The company exports to more than 30 countries and has an order book of around Rs. 1,548 crore.
It is also planning to add 1,00,000 MTPA of manufacturing capacity.
Revenue mix
- Engineering products: 60 percent
- Textiles: 40 percent
Geographic mix
- Domestic market: 88 percent
- Exports: 12 percent
Financial performance
Year-on-year
Compared with the previous year:
- Revenue rose from Rs. 274 crore to Rs. 346 crore, up 26 percent
- Operating profit increased from Rs. 29 crore to Rs. 39 crore, up 34 percent
- Net profit grew from Rs. 16 crore to Rs. 30 crore, up 87 percent
Quarter-on-quarter
Compared with the previous quarter:
- Revenue increased from Rs. 251 crore to Rs. 346 crore, up 37 percent
- Operating profit declined from Rs. 43 crore to Rs. 39 crore, down 9 percent
- Net profit rose from Rs. 26 crore to Rs. 30 crore, up 15 percent
TL;DR:
Tembo Global Industries has approved a 1:10 stock split, subject to shareholder approval. The board also approved the conversion of 4.05 lakh warrants into equity shares, while the company continues to expand capacity and maintain a Rs. 1,548 crore order book.
AI summary:
- Tembo Global Industries approved a 1:10 stock split.
- Shareholders will vote on the proposal at an upcoming EGM.
- The board approved conversion of 4.05 lakh warrants into equity shares.
- Paid-up capital increased to Rs. 18.95 crore.
- The company reported 87% growth in annual net profit.
