Honda India Power shares dive 11% as company's Q4 profit shrinks

Shares of Honda India Power Products Ltd fell sharply in Monday's trade after the company reported a 62.71 per cent slide in its fourth quarter (Q4 FY23) net profit. The stock plunged 10.85 per cent to hit a day low of Rs 2,197.70 over its previous close of Rs 2,465.20. A total of 5,315 shares changed hands today on BSE, which was more than five times compared to the two-week average volume of 1,056 shares. Turnover on the counter stood at Rs 1.20 crore, commanding a market capitalisation (m-cap) of Rs 2,287.58 crore.

At today's low price of Rs 2,197.70, the stock traded 24.52 per cent lower from its 52-week high of Rs 2,911.80, a level seen on December 5 last year. That said, it has gained 64.37 per cent from its one-year low of Rs 1,337.05, hit on May 13, 2022.

Honda India Power was last seen trading higher than the 50-day, 100-day and 200-day moving averages but lower than the 5-day and 20-day moving averages. The company's stock has a price-to-equity (P/E) ratio of 26.36. It has a price-to-book (P/B) value of 3.56.

The scrip has a one-year beta of 1.12, indicating high volatility.

"Honda India Power was overbought on the daily charts and bearish with strong resistance at Rs 2,464. If daily support of Rs 2,160 is broken, a further fall till Rs 2,068 looks likely," said AR Ramachandran from Tips2trades.

Honda India's profit slipped to Rs 5.81 crore in the March 2023 quarter against Rs 15.58 crore in the year-ago period. The company's total income slipped 2.59 per cent, year-on-year (YoY), to Rs 318.28 crore in Q4 FY23 from Rs 326.73 crore in Q4 FY22. Current liabilities rose to Rs 191.42 crore in the March 2023 quarter (YoY).

The company's Board also approved a dividend of Rs 16.50 for the financial year ended March 31, 2023 (FY23). "The Board of Directors have recommended a dividend of Rs 16.50 per share (165 per cent of an equity share of par value of Rs 10 each) for the year ended March 31, 2023," Honda India stated in an exchange filing.

The dividend would be paid to the shareholders on September 5, 2023.

Honda India Power Products is a division of Honda Motor Co Japan. It was incorporated in 1985.

Meanwhile, Indian equity benchmarks traded higher in early trade, led by gains in financials, consumer and technology stocks. The 30-share BSE Sensex pack was up 265 points or 0.43 per cent to trade at 62,293, while the broader NSE Nifty index was trading 74 points or 0.40 per cent higher at 18,388.

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