Dividend stock: Multibagger small-cap stock declares ₹53 per share dividend. Should you buy before record date?

Dividend Stock: Multibase India, a multibagger small-cap stock, has grabbed attention with its latest dividend declaration. The company announced an interim dividend of ₹53 per share for the financial year 2024-25, which is 530% of its face value of ₹10 per share.

Historic Dividend Announcement

In an exchange filing dated November 13, Multibase India stated, "Recommended interim dividend of INR 53/- (Rupees Fifty-Three only) per equity share having a face value of INR 10/- (Rupees Ten only) each, for the financial year 2024-25." The record date for determining eligible shareholders has been set for November 27. This means only shareholders who own the stock before this date will receive the dividend payout. Those buying shares after November 27 will not qualify for this substantial dividend.

The company plans to pay or dispatch the dividend on or before December 12, 2024, after applicable taxes. This marks a significant milestone for Multibase India, as the payout is the highest in the company’s history. Previously, the firm declared dividends of ₹3 in August 2024, ₹2 in September 2023, Re 1 in September 2022, and ₹2 in September 2021, as per data from the BSE website.

Multibase India’s robust financial results for the quarter ending September 2024 have added to investor confidence. The company reported a 113.43% surge in net profit, reaching ₹4.29 crore, up from ₹2.01 crore in the same period last year. Revenue also saw an impressive increase of 13.28%, rising to ₹18.42 crore from ₹16.26 crore in September 2023, as reported by Business Standard.

Founded in 1991 as Synergy Polymers Limited, Multibase India has evolved significantly over the years. The company, which specialises in manufacturing thermoplastic elastomers and silicone-based products, changed its name to Synergy Multibase Limited in 2002 and finally to Multibase India Limited in 2007. The specialty chemicals manufacturer serves a niche market with its innovative product offerings.

Stock Performance and Trends

Multibase India’s stock has delivered stellar returns for investors, making it a multibagger. The stock has surged over 109% in the past year and gained 102.3% year-to-date. Following the recent dividend announcement on November 13, the stock rallied around 20% over three consecutive trading sessions. Notably, it recorded a nearly 79% gain in November alone, despite a 4% decline in October.

The stock reached a 52-week high of ₹472 during intra-day trading on November 19, closing the session at ₹467.25. It has appreciated by more than 117% from its 52-week low of ₹215.15, which it hit in November last year.

Should You Buy Before the Record Date?

Investment experts have provided their take on whether to buy Multibase India shares ahead of the record date. Anshul Jain, Head of Research at Lakshmishree Investment and Securities, commented, “Multibase India shares are among the multibagger stocks that have delivered strong returns in recent years. The small-cap stock was trading in the ₹180 to ₹300 range over the last five years but has recently broken out, creating a new support level at ₹400.”

Jain suggested that shareholders could use ₹400 as a trailing stop loss and noted that the stock is a strong buy-on-dips candidate. For new investors, he recommended a medium to long-term target of ₹750 while emphasising the importance of maintaining a strict stop loss at ₹400 for any new positions.

With a record-breaking interim dividend, strong quarterly results, and solid stock performance, Multibase India has positioned itself as a compelling investment. However, potential investors should weigh the opportunities against the stock's recent surge and maintain prudent risk management strategies, as advised by market experts.

Disclaimer: The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.