1:1 Bonus Share: Low PE multibagger penny stock below Rs 25; Board likely to announce rights issue!

The stock gave multibagger returns of 140 per cent returns in just 1 year and a whopping 650 per cent in 3 years.

Mishtann Foods Ltd is holding a Rights Issue Committee meeting on Thursday, March 7, 2024, to discuss the terms of their upcoming rights issue. This includes the number of shares to be issued, the price per share, the entitlement ratio for existing shareholders, and the timeline for the offering. The committee will also finalize the official offer documents, including the letter of offer, abridged letter of offer, rights entitlement letter, and application form.

Mishtann Foods Ltd, established in 1981, processes, packages, and sells various food products like Basmati rice, wheat, pulses, and salt. They offer both branded and unbranded options, with "Pristino" and "Snowflake" being their prominent Basmati rice brands. Their processing plant in Himatnagar, Gujarat, boasts a high capacity and they have a strong distribution network reaching over 70,000 retailers through 15 super stockists. They also have a significant presence in the hotel and restaurant industry.

The company reported significant financial growth in Quarterly Results (Q3FY24), with revenue from operations surging 101.86 per cent to Rs 330.52 crore, driven by strong demand. This translated to a substantial increase in profitability, with EBITDA rising 326.47 per cent to Rs 96.51 crore and PAT soaring 579.20 per cent to Rs. 93.05 Cr. Consequently, both EBITDA and PAT margins witnessed significant improvements, reaching 29.20 per cent and 28.15 per cent respectively.

The company's recent financial performance further supports this optimism. Mishtann Foods delivered remarkable growth in FY23, with net sales soaring by 90.33 per cent to reach Rs 490.51 crore and net profit witnessing a phenomenal 395.97 per cent surge to Rs 5.79 crore compared to FY22. This remarkable performance was further enhanced by the company's decision to reward shareholders with a 1:1 bonus share issue and a dividend of Rs 0.0010 per share, demonstrating its commitment to shareholder value creation.

The company has reduced its debt and delivered good profit growth of 68 per cent CAGR over the last 3 years. The stock has a PE of 8x whereas the industry PE is 36x. With its robust financial performance, strategic focus on Basmati rice, and growing investor interest, Mishtann Foods is poised for continued success, solidifying its position as a leading player in the Indian FMCG sector.

Today, shares of Mishtann Foods Ltd plunged 2.22 per cent to Rs 20.28 per share from its previous closing of Rs 20.74 with an intraday high is Rs 21.20 and an intraday low of Rs 20.19. The stock’s 52-week high is Rs 26.50 and its 52-week low is Rs 7.09. The stock gave multibagger returns of 140 per cent returns in just 1 year and a whopping 650 per cent in 3 years. This FMCG Small-Cap stock should be kept under the radar.

Disclaimer: The article is for informational purposes only and not investment advice.