VST Industries to Consider First Ever Bonus, Stock Soars Over 15% in Just a Day!

Shares of VST Industries Ltd. experienced a significant surge of over 15% on Friday, reaching a fresh 52-week high. This remarkable uptrend occurred despite the broader sell-off in the Indian markets. The primary catalyst behind this surge was the company’s announcement regarding the consideration of issuing bonus shares at its upcoming board meeting.

Bonus Shares Announcement

VST Industries has scheduled a board meeting on July 25, during which the issuance of bonus shares will be a key agenda item. Additionally, the board will review the company’s earnings for the June quarter. This marks a notable milestone for VST Industries, as it is the first time the company is contemplating a bonus share issue. Notably, the company has also never executed a stock split in its history.

Consistent Dividend Payments

Since 2020, VST Industries has demonstrated a commitment to rewarding its shareholders, consistently paying dividends exceeding Rs 100 per share. This trend of substantial dividend payments dates back to 2012 when the company began disbursing dividends in excess of Rs 50 per share. This strong dividend track record underscores the company’s robust financial health and dedication to shareholder value.

Mutual Funds’ Stake in VST Industries

Domestic mutual funds have shown confidence in VST Industries, holding a significant 11.03% stake in the company. This substantial institutional investment reflects the market’s positive outlook on VST Industries’ growth potential and stability.

Focus on Cigarette and Tobacco Products

Headquartered in Hyderabad, VST Industries is a prominent manufacturer of cigarettes and tobacco products. The company’s operations include manufacturing and marketing cigarettes, as well as trading in unmanufactured tobacco. VST Industries is also an associate of British American Tobacco Plc, which holds a 32.2% stake in the company.

Upcoming Union Budget and Market Focus

Investors are keenly watching VST Industries in anticipation of the Union Budget presentation on July 23. Any potential announcements regarding excise duty on cigarettes could significantly impact the stock’s performance. The company’s strong presence in the tobacco industry makes it particularly sensitive to regulatory changes affecting excise duties.

Financial Performance

For the twelve months ending March 31, 2024, VST Industries reported revenue from operations (net of excise) of Rs 1,420 crore, and a profit after tax (PAT) of Rs 302 crore. In comparison, the corresponding period of the previous year saw revenue of Rs 1,292 crore and a PAT of Rs 327 crore. Despite a slight dip in profitability, the company has demonstrated resilience and continued growth in its operational revenue.

In conclusion, VST Industries recent stock performance, coupled with its strategic plans and consistent dividend history, makes it a company to watch. The upcoming board meeting and the Union Budget presentation are key events that could further influence the stock’s trajectory.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.