FMCG stock jumps 3% after announcing buyback of 11 lakh shares at 15% premium

Synopsis: Puretrop Fruits’ stocks surged 3% as it announced a Rs 22 crore buyback of 11 lakh shares at Rs 200, which is a 15% premium. The move signals confidence amid improving performance, with promoters holding 62.4% and participating in the buyback.

The shares of this company, which is in the business of fresh fruits, vegetables, fruit pulp & concentrate, and cold-processed juice, had its shares in momentum today after the company announced a buyback worth Rs 22 crore, showcasing the company’s confidence in its operation.  

With the market cap of Rs 141 crore, the shares of Puretrop Fruits Ltd gained 3% after reaching a high at Rs 178.50, compared to its previous day’s closing price of Rs 173.50. The shares are trading at a PE of 63, whereas their industry PE is at 21.7.

About the buyback

The decision of the board of directors of Puretrop Fruits to return Rs 22 crore by way of buyback of up to 11 lakh equity shares at Rs 200 per share is quite positive regarding resource allocation, particularly when it is taking place in a company that has a relatively small equity base. The proposed amount of buyback is pegged at 17.42% of its paid-up capital & free reserves. The shares will be bought back at a premium of 15% from yesterday’s closing price of Rs 173.5 per share. 

The announcement has occurred at a moment when the financial performance of the company has started showing signs of improvement. This has been identified by examining the Q3 FY26 results, as the company has been able to return to profitability after a period of losses, due to income generated from discontinued operations as well as enhanced cost management due to restructuring activities, for instance

On the governance front, the intention of the promoters to participate in the buyback, with the promoters holding approximately 62.4% interest, gives strength to this move as their interests align with other shareholders as well. The fact that 15% has been set aside for small shareholders, as required, also helps retail participation. The buyback move thus strengthens shareholders’ confidence in the business being stable after simplification of strategies and the smooth transition

Financials

The revenue from operations for the company stood at Rs 26.37 crores in Q3 FY26 compared to Q3 FY25 revenue of Rs 19.78 crores, up by about 33 per cent YoY. Similarly, the net profit stood at Rs 2.71 crore in Q3 FY26, up compared to the Rs 1.69 crore loss in Q3 FY25.

Puretrop Fruits Ltd operates as an integrated agribusiness entity dealing with sourcing and processing as well as exporting fruits, having been operational as a supplier of grapes and pomegranates from India to European retail markets for several years now. With strong farmer linkages, adherence to the highest food safety and traceability norms, as well as a state-of-the-art fruit-processing unit at Nashik, the company has been able to create a sustainable business model through quality-based exports as well as fruit processing.

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