Tosrifa shares surge an unusual 44% in 8 days

Infographic: TBS

Tosrifa Industries Limited, an export-oriented knit garments manufacturer, has seen a sharp 44% rise in its share price within just eight trading days, despite the absence of any significant disclosures or material information.

According to the Dhaka Stock Exchange (DSE), the company's share price was Tk17.9 on 10 February but surged to Tk25.8 before declining by 2.71% yesterday to close at Tk25.1.

Following the unusual price movement, the DSE issued a query. In response, Tosrifa Industries, which specialises in knitting, dyeing, designing, and manufacturing readymade garments for export, stated that there was no undisclosed price-sensitive information behind the recent surge.

However, market insiders suspect the sudden spike could be a sign of manipulation, particularly given the broader economic and political uncertainties. Many fundamentally strong and blue-chip stocks are currently trading at undervalued prices, so such a rapid increase in Tosrifa Industries' stock appears highly suspicious, they opined.

Moreover, in the last quarter, several companies in the textile sector performed well despite the economic uncertainty but, unlike Tosrifa Industries, their share prices did not see a sharp rise or high demand in the market, they added.

A review of the company's trading pattern over the last six months shows that on 21 August, each share was priced at Tk27.2. Since then, the price gradually declined to its lowest level in nearly two years before rebounding from 10 February.

Meanwhile, the textile firm reported a 46% growth in net profit for the second quarter (October to December 2024). The company recorded a profit of Tk1.29 crore during this period, up from Tk0.88 crore a year earlier.

Its earnings per share (EPS) in this quarter stood at Tk0.19, compared to Tk0.13 in the previous year. The company stated that its profit increased due to higher sales revenue growth. However, its net cash flow per share declined during the quarter, as it made higher payments to its suppliers.

Last fiscal, the company generated Tk470.29 crore in revenue, with a net profit of Tk4.65 crore. It paid a 3.5% cash dividend to shareholders.

In the company's FY24  annual report, Mohim Hassan, the managing director stated that "Our long-term aim is to achieve stable progress and sustainable growth."

"To overcome challenges and boost export earnings, we are focusing on apparel diversification, increasing productivity and efficiency, product innovation, exploring new global markets, skill development of RMG workers, and controlling uncontrollable expenses through efficient management techniques.

"Furthermore, the company has diversified its investments and continues to focus on new projects to enhance stakeholder value," he added.

In the July to December period, its profit after tax declined 42% to Tk1.79 crore from Tk3.12 crore compared to the previous year. In this period, its earnings per share stood at Tk0.26, which was Tk0.46 in the same period of the previous year.

End of December 2024, its net asset value per share stood at Tk31.03.

Recently, its sponsor-director, Naim Hassan, sold 16.17 lakh shares from his holding of 81.56 lakh shares.

As of 31 January 2024, the company's ownership structure comprised 43.42% held by sponsors and directors, 25.82% by institutional investors, and 30.76% by general investors.

In 2015, the company raised Tk63.87 crore from the capital market for the initial public offering (IPO) for business expansion. It issued 24,566,200 ordinary shares of Tk10 each including Tk26 including a premium.