1:5 Share Split: Textile Stock Jumps 3% After Receiving Board Approval for Split

Synopsis: Textile stock Pashupati Cotspin gained momentum after its board approved a 1:10 stock split aimed at improving liquidity and retail participation. The shares are trading at a premium valuation of 100x PE and have delivered over 1,450% returns in five years, with recent quarterly profit growth supporting investor sentiment.

The shares of this company, which is part of the Pashupati group, which operates in the textile industry and does cotton ginning and spinning of cotton yarn and manufactures cotton bales, cotton yarn and black cotton seeds, had its shares in momentum today after the board approved a stock split. The stock split is aimed at improving liquidity and making the shares more affordable for retail investors, potentially increasing trading participation.

With a market cap of Rs 1,600 crore, the shares of Pashupati Cotspin Ltd gained 3% in today’s trading session and reached a high of Rs 1,025. When compared to its previous day’s closing price of Rs 992.60, it is trading at a PE of 100 compared to its industry PE of 20. The shares have given a return of more than 1,450% in the last 5 years.

About the Split 

Pashupati Cotspin Limited has decided to split its stock 1:10, meaning that one existing equity share of face value Rs 10 will be split into ten equity shares of face value Rs 1 each. This split has been approved by the company’s board and is pending approval from its shareholders. The split will not affect the company’s overall paid-up capital but will significantly increase the number of outstanding shares.

The split is primarily intended to make the company’s shares more liquid. By splitting the face value of the shares, the company is likely to lower its market price as well. This will make the shares more accessible to individual investors, who are generally not interested in buying shares that are too expensive.

From a technical perspective, this is a capital restructuring exercise. The company’s authorised and paid-up capital will remain the same, but the number of shares will significantly increase. If market sentiment continues to be positive, this split will make the company’s shares more accessible, but it will not affect the company’s earnings or intrinsic value.

Financials and more 

The revenue from operations for the company stood at Rs 159 crores in Q3 FY26 compared to Q3 FY25 revenue of Rs 165 crores, up by about 4 per cent YoY. However, the net profit stood at Rs 2.73 crore in Q3 FY26, up compared to the Rs 0.95 crore profit i   n Q3 FY25.

Pashupati Cotspin Ltd is a vertically integrated textile major functioning under the umbrella of the Pashupati Group, with a robust “farm to fabric” business model encompassing ginning, oil milling, spinning, TFO, weaving, sizing, and warping. Founded in 1997 and listed on the NSE, the company exports to more than 35 countries and sustains its operations through large and modern warehousing facilities. 

Apart from the textile segment, the group has ventured into renewable energy with 17.6 MW solar and wind capacity, hospitality, and pharmaceuticals (through Uniza), which indicates a business approach emphasising integration, size, and diversification.

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