After 105% price jump in 24 days, Rahima Food suspends its cashew nut plant 

After witnessing a 105% jump in its share price over 24 trading sessions at the Dhaka Stock Exchange (DSE), Rahima Food Corporation Limited, a listed food and allied sector firm, informed that it has suspended its cashew nut processing plant.

Today (13 August), in a disclosures published on the stock exchanges said that its board on 12 August has taken the decision that production activity of Cashew Nut processing plant will remain suspended until further notice with immediate effect.

According to the DSE data, on 7 July after three trading sessions of suspension of coconut oil plant, its per share price was Tk82.2, which jumped to Tk168.9 each on 11 August, which is the highest in a year.

Despite falling in revenue and profit in the first-nine months of FY25, surprisingly its shares price began to increase, raising eyebrows of the investors. 

The price-to-earnings (P/E) ratio measures a company's share price relative to its earnings per share (EPS) is 443 until 13 August, as per DSE data. The ratio seems significantly higher, because a lower P/E ratio indicates lower risk for the stock, says market insiders.

Following the announcement of cashew nut plant suspension, its share price declined by 7.79%, or Tk13 per share, to Tk153.80, with a trading value of Tk15.67 crore at the Dhaka Stock Exchange (DSE) today. Besides, a total of 9.79 lakh shares changed hands.

A month before on 2 July, it suspended its coconut oil production plant with immediate effect until further notice.

Its revenue comes from three segments including sales of cashew nuts, coconut oil and by-products of cashew nuts, according to its financial statement. 

However, the disclosure did not mention the reason for suspending production. When contacted by phone, the company secretary, Md Zakir Hossain, did not respond.

Meanwhile, DSE data showed that over the last three months, Rahima Food's shares surged around 150%, rising to Tk168.90 per share on 11 August from Tk67.56 on 14 May this year.

Regarding the price hikes, the DSE served four query notices to the company. 

In response, the company informed that there is no undisclosed price-sensitive information regarding the recent price hike and trading volume.

The paid-up capital of Rahima Food Corporation, a food and allied sector firm, is Tk20 crore, divided into 2 crore shares, with a 62.62% free float.

In the first nine-months until July to March period of FY25, its revenue almost halved or 48% declined to Tk8.72 crore from Tk11.10 crore in the same time of the previous fiscal year. 

While its net profit declined by 69% to Tk51 lakh with an earnings per share (EPS) of Tk0.26. 

At the same time of the previous year, its net profit was Tk1.66 crore with EPS of Tk0.83. 

In FY24, it made a profit of Tk2.13 crore and it had paid a 10% cash dividend for its shareholders.