1:10 Stock Split: FMCG Stock in Focus After Board Approves Share Split

Synopsis: Manbro Industries approved a 1:10 stock split, converting each Rs 10 share into 10 shares of Rs.1, aiming to improve liquidity and retail participation. While the split does not change valuation, shares remain in focus amid strong revenue growth but a sequential decline in quarterly profit.

The shares of this company, which is engaged in importing, exporting, trading, distributing, and manufacturing a wide range of products across the following categories: food and beverages, pharma products, and more, had its shares in the news after the company announced a stock split. 

With the market cap of Rs 462 crore, the shares of Manbro Industries Ltd are trading at Rs 796 and are trading at a PE of 332, whereas its industry PE is at 23.6. The shares have given a return of over 5,700% over the last 5 years. 

About the stock split 

The Board of Manbro Industries has approved the stock split in the ratio of 1:10, subdividing each equity share of face value of Rs 10 each into 10 equity shares of Re.1 each, subject to shareholder and regulatory approvals. This step increases the number of outstanding shares manifold but keeps the total paid-up share capital at Rs 5.80 crore unchanged, thus having no effect on the valuation of the company purely from an accounting angle.

From a strategic standpoint, the company has declared that the main reason for the split is to make the shares more affordable and attractive to retail investors to improve liquidity in the secondary market. A lower face value usually reduces the trading price correspondingly and could well lead to improved participation and trading volumes in general, particularly for smaller-cap issues.

The impact of the increase in the number of shares for the investors is clear. Every 1 share will result in the investors being rewarded with 10 shares. If the investor currently holds 100 shares in the company, they will end up with 1,000 shares after the split. While the shares granted to the investors increase tenfold, the value of their investment does not change.

The split is expected to be completed within two months after receiving necessary approvals, with the record date to be announced later. Overall, while the move does not change fundamentals or intrinsic value, it could improve market accessibility and potentially increase investor interest due to better liquidity and affordability.

The revenue from operations for the company stood at Rs 46 crores in Q3 FY26 compared to Q2 FY26 revenue of Rs 14 crores, up by about 229 per cent YoY. However, the net profit stood at Rs 1.16 crore in Q3 FY26, down compared to the Rs 1.76 crore profit in Q2 FY26.

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