5:1 stock split after 23 years announced by this LIC-backed Pharma Giant; Stock trades at high ROE & high ROCE
The shares of the company have an ROE of 22 per cent and an ROCE of 27 per cent.
The stock market ended the day in red on Friday with BSE Sensex Index and NSE Nifty-50 Index plunged over 1 per cent. Though the market was in red, this pharma giant stock backed by Life Insurance Corporation of India (LIC) gained 0.95 per cent to Rs 6,960 per share with an intraday high of Rs 6,981.80 and an intraday low of Rs 6,868.70 from its previous closing of Rs 6,894.30. The stock is down by per cent from its 52-week high of Rs 7,030 per share and up by per cent from its 52-week low of Rs 5,212.10 per share.
The stock name is Dr. Reddy's Laboratories Ltd.
Dr Reddy's Laboratories Ltd is a prominent Indian pharmaceutical company specializing in the production and distribution of a diverse range of healthcare solutions, encompassing Active Pharmaceutical Ingredients (APIs), customized pharmaceutical services, generic drugs, biosimilars and innovative formulations.
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The company's Board of Directors has approved a 5-for-1 stock split, converting each Rs. 5 face value equity share into five Re. 1 face value equity shares. This move aims to increase the stock's liquidity and expand the shareholder base by making shares more affordable. Consequently, the number of American Depositary Shares (ADSs) held by investors will proportionally increase as each ADS still represents one underlying equity share. The company's authorized, issued, and paid-up share capital will increase in number of shares but remain the same in total value. The split will be effective within two months of shareholder approval.
The company has a market cap of Rs 1.16 lakh crore and reported positive numbers in its Quarterly Results (Q1FY25) and annual results (FY24). The shares of the company have an ROE of 22 per cent and an ROCE of 27 per cent. Investors should keep an eye on this Large-Cap stock.
Disclaimer: The article is for informational purposes only and not investment advice.
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