IT stock jumps 15% after announcing robust results and 1:4 bonus issue

 

The shares of this smallcap company surged around 11 percent in Wednesday’s trading session after announcing robust results and bonus shares in the ratio of 1:4. 

Price Movement: 

With a market capitalization of Rs. 3,121 crores, the shares of Saksoft Ltd started Wednesday’s trading session on a higher note at Rs. 278.95 compared to its previous close of Rs. 266.10. During the trading session, the shares hit a high of Rs. 303.40, gaining around 11 percent and are currently trading at Rs. 294 apiece. 

What Happened: 

Such a bullish movement in the share price was observed after the company announced their Q1FY25 results. Quarterly, the revenue increased by around 3 percent from Rs. 194.90 crores during the March quarter to Rs. 201 crores in the June quarter. In addition, the net profits jumped by 10 percent from Rs. 23.20 crores to Rs. 25.58 crores during the same period. 

Comparing the same metrics on a YoY basis, the revenue zoomed by around 10 percent from Rs. 183.47 crores in Q1FY24 to Rs. 201 crores in Q1FY25. On the other hand, the net profits jumped marginally by 2 percent from Rs. 25.15 crores to Rs. 25.58 crores. 

The company derives its revenue from various segments, with 42 percent originating from Hitech Media and Utilities, 31 percent from Fintech, 16 percent from Transportation and Logistics, and the remaining 11 percent from Retail E-commerce. 

Additionally, the Board of directors of the company have recommended the issue of Bonus Shares in the ratio of 1:4 i.e. one new bonus equity share of Rs. 1 each fully paid up for every four existing equity shares of Rs. 1 each fully paid up subject to the approval of shareholders. 

The bonus equity shares will be issued out of Free Reserves and Securities Premium accounts available based on Audited Financial Statements as of 31st March 2024. 

Moreover, the Board has fixed Friday, 13th September 2024 as the Record date to determine the eligibility of shareholders to receive bonus shares. 

Important Financial Ratios: 

In terms of key financial metrics, the company reported a Return on Equity (RoE) of 19.02 percent and a return on capital employed (RoCE) of 23.09 percent for the period spanning FY23-24. Additionally, during the same period, the net profit margin stood at 12.62 percent. 

Future Outlook: 

The company is focusing on investments in subject matter experts, cybersecurity, infrastructure, and AI to enhance productivity. Additionally, they aim to achieve a revenue target of Rs. 1,000 crore by FY25. 

Company Profile: 

Saksoft Ltd is engaged in providing business intelligence and information management solutions predominantly to mid-tier companies based out of the USA and UK. The company offers solutions such as application development, cloud services, business intelligence, analytics, and intelligent automation. 

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