The company last month demerged its flagship brand RedTape into a separate entity. As per the demerger agreement approved by the National Company Law Tribunal, shareholders of Mirza International received one fully paid-up equity share of RedTape, with a face value of Rs 2, for each unit they held in Mirza International.
In today’s trade, Shares of Mirza International hit an upper circuit of 10% at Rs 66.4 on BSE.
The company last month demerged its flagship brand RedTape into a separate entity. As per the demerger agreement approved by the National Company Law Tribunal (NCLT), shareholders of Mirza International received one fully paid-up equity share of RedTape, with a face value of Rs 2, for each share they held in Mirza International. RedTape is expected to list on the stock exchanges soon.
According to the company filing on the bourses, the net worth of the yet-to-be-listed entity is Rs 301 crore. However, analysts feel the rally may wane out soon as the stock has run up too fast.
“Though we believe that the demerger would help the company to unlock the true potential of international and domestic businesses in the long run, the share price has jumped significantly in recent days and offer little comfort to play the story at current valuations,” said Manish Chowdhury, head of research, Stoxbox.
Technically, Mirza International is trading below six out of eight SMAs. The stock traded higher than the 5-day, and 10-day moving averages but lower than the 20-day, 30-day, 50-day, 100-day, 150-day, and 200-day moving average. Day RSI (14) is 27.9. The RSI below 30 is considered oversold, this implies that the stock may rebound.
In Q3 FY23, Mirza International reported a 30% increase in net profit to Rs 56 crore, compared with Rs 43 crore in December 2021, although its revenue rose marginally from Rs 585 crore to 592 crores during this period.
The company has reduced debt from a peak of Rs 357 crore in March 2019 to Rs 82 crore at the end of September 2022. Its working capital requirements have reduced from 123 to 95.8 days in FY2022.
Mirza International is a leading leather footwear manufacturer with an annual manufacturing capacity of 54 million pairs of shoes, owns brands such as RedTape, Mode, BondStreet, Oaktrak, and Yezdi.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)
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