Matrimony.com share price rallied 18.5 per cent to Rs 790 apiece on BSE on Friday, after the board approved share buyback worth up to Rs 75 crore, at price of Rs 1,150 per share through tender offer. The board has also recommended a final dividend of 100 per cent (Rs 5 per equity share of par value of Rs 5 each), subject to the approval of the shareholders. The company said that the indicative maximum number of equity shares proposed to be bought back would be 6.52 lakh shares. The maximum buyback price is at 72.5 per cent premium to the stock’s yesterday’s closing price of Rs 666.65 apiece.
The approved buyback price of Rs 1,150 is much higher than the present market price despite the surge that the stock witnessed today. “Given the kind of percentage appreciation that one might get, it would be perfectly okay to go for the buyback price and participate in the buyback offer at 1150. However, the acceptance rate is likely to be lower,” Milan Vaishnav, CMT, MSTA, Consulting Technical Analyst and founder, Gemstone Equity Research & Advisory Services, told FinancialExpress.com
The primary objective of the share buyback programme is to control the fall in stock’s value by reducing the supply, which will eventually push up the share price through a better price to earnings (P/E) multiple. “As the overall market may show some recovery, we expect Matrimony stock to touch the levels of 850 in near term and investors may hold their positions,” Ravi Singh, VP & Head of Research, Share India Securities, told FinancialExpress.com.
“Even though the company’s financials are quite good with a good debt-equity ratio as well, the current bearish sentiment prevailing in the market could dampen the current uptrend of Matrimony.com, said AR Ramachandran, Co-founder & Trainer, Tips2Trades. He also told FinancialExpress.com that technically, 775-785 has been a strong resistance zone lately and buying is advised only if next week the stock closes above this level. “Support will now be at 711,” he said.
Matrimony.com posted a 15.6 per cent rise in consolidated net profit to Rs 11.7 crore on a 9.4 per cent increase in revenue to Rs 110.6 crore in the fourth quarter of FY22 over Q4 FY21. Analysts at Yes Securities said that overall, the company posted muted results for the quarter. “However, the billings have shown strong growth in the quarter. We currently have an add rating on the stock. Trades at PE of 19.8x on FY24E EPS,” they said.
The stock recommendations in this story are by the respective research analysts and brokerage firms. Financial Express Online does not bear any responsibility for their investment advice. Capital markets investments are subject to rules and regulations. Please consult your investment advisor before investing.
