Highest dividend-yield stock quoted dirt-cheap on the BSE!
Generally Rs 10 paid-up stock that carries a dividend of 1725% (Rs 172.50 per share) would have commanded a price of not less than Rs 2000. But, Taparia Tools, which earned more than Rs 200 per share from its operations and distributed Rs 172.50 as dividend for fiscal 2022, was quoted on March 20, 2023 at just Rs 10.50. On this price the dividend yield works out to 1643%! The company has now proposed a first interim dividend of 775% as against 700% first interim last year which indicates that in all probability current year’s yield may shoot up beyond 1700%!!!
The Nasik (Maharashtra)-based Taparia Tools Ltd (TTL) started manufacturing hand tools in 1969 in technical collaboration with a Swedish company. The senior management from Taparia Tools had reportedly gone to Sweden and took practical training in their plant for more than a year. A senior technical manager from the Swedish company also came to India and stayed here for about two years to establish the technology in India.TTL has been since then consistently producing all the hand tools in India with the technology of its collaborators. The Company’s manufacturing facilities includes modern Forge shop, Machine shop, Heat treatment, Polishing & Nickel chrome plating. The company has a wide range of hand tools in its product portfolio.
Fabulous Financials
TTL has very impressive financials. Its growth in last three fiscals has been phenomenal. From Rs 475 Cr in fiscal 2020, the company’s top line has leapt to Rs 670 Cr in March 2022. In the current fiscal it is poised to reach Rs 750 Cr. Net profit more than doubled in two years, from Rs 30 Cr in 2020 to Rs 65 Cr in 2022 and in the current fiscal it is likely to exceed Rs 75 Cr. All these have been achieved on a tiny capital base of Rs 3 Cr!
|
TAPARIA TOOLS’ FUNDAMENTALS (Amount in Cr) |
||||||||
| Period Ended |
Dec22 |
Mar22 | Mar21 | Mar20 | Mar19 | Mar18 | Mar17 |
Mar16 |
| Months |
9 |
12 | 12 | 12 | 12 | 12 | 12 |
12 |
| Revenue |
569.61 |
667.62 | 536.05 | 471.51 | 471.15 | 407.81 | 373.1 |
338.11 |
| Operating Profit |
71.53 |
87.38 | 64.61 | 39.18 | 35.39 | 21.27 | 19.31 |
22.04 |
| OPM% |
12.6 |
13.1 | 12.1 | 8.3 | 7.5 | 5.2 | 5.2 |
6.5 |
| Other Income |
2.46 |
1.88 | 1.7 | 3.87 | 1.68 | 1.37 | 0 |
0 |
| EBIDTA |
73.98 |
89.26 | 66.31 | 43.05 | 37.07 | 22.64 | 19.31 |
22.04 |
| EBIDTA % |
12.9 |
13.3 | 12.3 | 9.1 | 7.8 | 5.5 | 5.2 |
6.5 |
| Interest |
0.15 |
0.11 | 0.2 | 0.24 | 0.05 | 0.12 | 1.3 |
2.26 |
| Depreciation |
1.28 |
1.76 | 1.67 | 1.67 | 0.65 | 0.49 | 0.42 |
0.44 |
| Tax |
18.04 |
22.17 | 16.62 | 10.58 | 12.63 | 7.61 | 6.16 |
6.68 |
| Net Profit |
54.28 |
65.09 | 47.80 | 30.59 | 23.51 | 14.55 | 11.42 |
12.65 |
| Equity |
3.04 |
3.04 | 3.04 | 3.04 | 3.04 | 3.04 | 3.04 |
3.04 |
| Reserves |
265.45 |
234.73 | 205.57 | 156.93 | 126.48 | 103.08 | 88.48 |
77.06 |
| Borrowing |
0 |
0 | 0 | 0 | 0 | 0 | 8.03 |
27.46 |
| Fixed Assets |
19.20 |
19.10 | 18.50 | 16.40 | 15.90 | 7.50 | 5.80 |
5.80 |
| Promoter Stake % |
69.72 |
69.72 | 69.72 | 69.72 | 69.72 | 69.72 | 69.72 |
69.72 |
| Promoter Shareholders |
20 |
20 | 20 | 20 | 20 | 20 | 20 |
20 |
| Public Shareholders |
238 |
238 | 232 | 249 | 241 | 256 | 259 |
265 |
| Total Shareholders: |
258 |
258 | 252 | 269 | 261 | 276 | 279 |
285 |
Poor Liquidity
Why the stock of a well established company that has a proven track record of liberal dividend distribution is quoting so low? The reason is not far to fetch. TTL is one of the illiquid stocks listed on the stock exchange. The company has a small equity capital Rs 3.04 Cr (30,35,750 shares of Rs 10 each) and it has only 258 shareholders. The promoter-group consisting of 20 shareholders have as much as 69.73% or 21,16,517 shares.
Under the public category, `directors and relatives’ namely Aryaman Taparia, Virendraa Bangur, Saurabh Bangur and Shree Kumar Bangur control 6.78% (2,05,716 shares). Shree Kanta Devi Taparia, Anant Taparia and Abhimanyu Mundhra hold 6.94% (2,10,462 shares). Two body corporates, Shree Satyanarayan Investments Company Ltd and Veer Enterprises Limited, associated with Bangurs and Taparias, control 10.56% (3,20,288 shares). This leaves a free float of only 3.84% or 1,16,666 shares which are held by 229 shareholders with an average holding of just 509 shares per person.
|
TAPARIA TOOLS’ SHAREHOLDING PATTERN AS AT 31-12-2022 |
|||
| SHAREHOLDER |
NOS. |
SHARES |
% |
| PROMOTER GROUP |
20 |
21,16,517 |
69.73 |
| Harnarayan Taparia |
3,64,650 |
12.01 |
|
| Rajdularidevi Taparia |
1,81,057 |
5.96 |
|
| Jayakrishna Taparia |
1,47,476 |
4.86 |
|
| Kusumdevi Taparia |
1,46,848 |
4.84 |
|
| Madhav Prasad Taparia |
1,43,565 |
4.73 |
|
| Bharat Taparia |
1,33,194 |
4.39 |
|
| Harnarayan Taparia (Huf) |
1,33,129 |
4.39 |
|
| Premadevi Taparia |
1,26,989 |
4.18 |
|
| Madhav Prasad Taparia (Huf) |
1,15,969 |
3.82 |
|
| Sudha Devi Taparia |
1,03,799 |
3.42 |
|
| Devi Prasad Taparia |
1,01,699 |
3.35 |
|
| Devi Prasad Taparia (Huf) |
80,958 |
2.67 |
|
| Sushil Kumar Taparia |
71,799 |
2.37 |
|
| Jaya Krishna Taparia (Huf) |
66,042 |
2.18 |
|
| Harsha Mundhra |
50,000 |
1.65 |
|
| Sushil Kumar Taparia (Huf) |
43,999 |
1.45 |
|
| Bharatkumar Taparia Huf |
10,718 |
0.35 |
|
| Bhagwati Binani |
55 |
– |
|
| Shashi Devi Bangur |
69,271 |
2.28 |
|
| Om Shri Yogeshwer Mfg & Trading Co |
25,300 |
0.83 |
|
| UNDER PUBLIC CATEGORY |
238 |
9,19,233 |
30.27 |
| Directors and their relatives |
4 |
2,05,716 |
6.78 |
| Aryaman Taparia |
35,277 |
1.16 |
|
| Virendraa Bangur |
56,526 |
1.86 |
|
| Saurabh Bangur |
56,555 |
1.86 |
|
| Shree Kumar Bangur |
57,358 |
1.89 |
|
| Investor Education and Protection Fund |
1 |
1,215 |
0.04 |
| Residents holding capital up to Rs. 2 lakh |
209 |
66,101 |
2.18 |
| Residents holding capital more than Rs 2 lakh |
4 |
2,30,900 |
7.61 |
| Shree Kanta Devi Taparia |
1 |
1,00,098 |
3.3 |
| Anant Taparia |
1 |
60,364 |
1.99 |
| Abhimanyu Mundhra |
1 |
50,000 |
1.65 |
| Non Resident Indians (NRIs) |
3 |
16,684 |
0.55 |
| Bodies Corporate |
14 |
3,98,347 |
13.12 |
| Shree Satyanarayan Investments Co. Ltd # |
46,000 |
1.52 |
|
| Veer Enterprises Limited * |
2,74,288 |
9.04 |
|
| HUFs |
2 |
250 |
0.01 |
| TRUST |
1 |
20 |
– |
| GROSS TOTAL |
258 |
30,35,750 |
100 |
| # – Controlled by Bangurs of West Coast Paper/Andhra Paper | |||
| * Anil Taparia is a director | |||
Asymmetrical Trading
The stock being illiquid there is no regular trading in TTL’s counter. In fact, in last 21 years, TTL was traded only on 39 days. Also, in these many years, only 43 trades were recorded with a total volume of 43377 shares. In the first three months of 2023, the stock has been traded on 5 days. On February 24, for the first time in the year, just one share was traded at Rs 10.50. On March 6, for a price of Rs 11.02, on a single trade 500 shares changed hands. The volume shot up to 5000 shares for a single trade on March 10. The largest volume in last 21 years took place on March 15 for 25000 shares in 2 trades. Price inched up to Rs 12.14 on that day.
|
TTL STOCK TRADE STATISTICS |
||||
|
TRN_DATE |
QUANTITY |
VALUE | TRADES |
PRICE |
| 20-03-2023 |
1 |
10.50 | 1 |
10.50 |
| 15-03-2023 |
25000 |
303500 | 2 |
12.14 |
| 10-03-2023 |
5000 |
57850 | 1 |
11.57 |
| 06-03-2023 |
500 |
5510 | 1 |
11.02 |
| 24-02-2023 |
1 |
10.50 | 1 |
10.50 |
| 13-07-2022 |
2000 |
24280 | 1 |
12.14 |
| 05-04-2022 |
3000 |
34710 | 1 |
11.57 |
| 17-03-2022 |
5000 |
55100 | 1 |
11.02 |
| 02-03-2022 |
500 |
5250 | 1 |
10.50 |
| 15-02-2022 |
1 |
32 | 1 |
32.80 |
| 10-02-2022 |
15 |
468 | 1 |
31.25 |
| 17-11-2021 |
12 |
1197 | 1 |
99.80 |
| 18-08-2021 |
11 |
1045 | 1 |
95.05 |
| 17-09-2020 |
400 |
36220 | 2 |
90.55 |
| 12-08-2020 |
33 |
2846 | 1 |
86.25 |
| 05-08-2020 |
1 |
82 | 1 |
82.15 |
| 19-11-2019 |
22 |
1721 | 2 |
78.25 |
| 07-11-2019 |
1 |
74 | 1 |
74.55 |
| 06-11-2019 |
1 |
71 | 1 |
71.00 |
| 05-11-2019 |
1 |
67 | 1 |
67.65 |
| 01-11-2019 |
1 |
64 | 1 |
64.45 |
| 31-10-2019 |
1 |
61 | 1 |
61.40 |
| 28-08-2019 |
25 |
1462 | 1 |
58.50 |
| 29-02-2016 |
50 |
2787 | 1 |
55.75 |
| 30-06-2014 |
100 |
5310 | 2 |
53.10 |
| 29-11-2011 |
100 |
5060 | 1 |
50.60 |
| 06-08-2010 |
50 |
2410 | 1 |
48.20 |
| 14-05-2010 |
50 |
2297 | 1 |
45.95 |
| 16-04-2010 |
50 |
2190 | 1 |
43.80 |
| 07-04-2010 |
50 |
2087 | 1 |
41.75 |
| 29-03-2010 |
50 |
1990 | 1 |
39.80 |
| 18-03-2010 |
50 |
1897 | 1 |
37.95 |
| 11-02-2010 |
200 |
7230 | 1 |
36.15 |
| 27-06-2008 |
550 |
18947 | 1 |
34.45 |
| 03-01-2008 |
50 |
1642 | 1 |
32.85 |
| 17-01-2007 |
200 |
6260 | 1 |
31.30 |
| 16-03-2005 |
200 |
5970 | 1 |
30.00 |
| 07-01-2004 |
50 |
1245 | 1 |
25.00 |
| 21-02-2002 |
50 |
1037 | 1 |
21.00 |
| Total |
43377 |
43 |
|
|
Meaningless Valuation
What’s baffling is, in fiscal 2020 when the company’s net profit was Rs 31 Cr the stock was quoted between Rs 58 and Rs 78. Profit advanced to Rs 48 Cr in next fiscal and the stock attracted quotes between Rs 82 and Rs 91. In fiscal 2022 profit climbed to Rs 65 Cr but, the stock price crashed from Rs 99.80 to Rs 10.50! In the current fiscal, despite profit growing further, the stock price has remained depressed between Rs 10 and Rs 12.14.
|
TTL STOCK PRICE TREND |
||||
| Period Ended |
Dec-22 |
Mar-22 | Mar-21 |
Mar-20 |
| Start Price |
11.57 |
95.05 | 82.15 |
58.50 |
| Year High |
12.14 |
99.80 | 90.55 |
78.25 |
| Year Low |
10.50 |
10.50 | 82.15 |
58.50 |
| End Price |
12.14 |
11.02 | 90.55 | 78.25 |
Pathetic Discounting
TTL’s current year earning gives an incredible EPS of over Rs 238 and its book value amounts as attractive as Rs 883 on Rs 10 paid-up share. The last traded price of Rs 10.50 discounts the company’s earnings 0.06 times and book value 0.01 times. And the current dividend base offers a fabulous yield of over 1700%!
|
TTL STOCK DISCOUNTING |
||
| Period Ended |
Dec-22 |
Mar-22 |
| Months |
9 |
12 |
| Revenue |
569.61 |
667.62 |
| EBIDTA |
73.98 |
89.26 |
| Tax |
18.04 |
22.17 |
| Net Profit |
54.28 |
65.09 |
| Dividend Amount |
23.56 |
52.37 |
| Equity |
3.04 |
3.04 |
| Reserves |
265.45 |
234.73 |
| Earnings Per Share |
238.07 |
214.11 |
| Book Value |
883.19 |
782.14 |
| Dividend% # |
775 |
1725 |
| Face Value |
10 |
10 |
| Market Price |
10.50 |
10.50 |
| Market Cap |
3.19 |
3.19 |
| Price/Revenue |
0.004 |
0.005 |
| Price /Earnings |
0.06 |
0.05 |
| Price /Book Value |
0.01 |
0.01 |
| Yield % |
1714.3 |
1642.9 |
| Pay-out Ratio |
75.6 |
80.5 |
| # For fiscal 2023 first interim of 775% has been declared as against 700% as first interim last year. | ||
Recent Developments
- Chairman and Managing Director, Shri Harnarayan Hanumanbux Taparia expired on March 5, 2023.
- Interim Dividend @ 775% has already been declared for the fiscal 2023. Shareholders whose names appear in the Register of Members on 16/03/2023 are eligible for the interim dividend.
What’s in store?
Recently, TTL has proposed to increase the Authorized Share Capital of the Company from Rs 5 Cr to Rs 35 Cr and in order to get shareholders’ approval an EGM has been called for on April 27, 2023. Considering the company’s current extra-ordinarily attractive financials, a bumper bonus issue cannot be ruled out.