Piccadily Agro began operations as a white crystal sugar making company and soon went into a logical expansion of setting up a distillery unit too. The stock today has risen over 14% with decent surge in volumes following its decision to declare a generous 1:1 bonus.

But one cannot help but wonder as to what could have prompted this bonus decision as its financial performance for Q3 surely did not warrant a bonus. It ended Q3FY15 with a net profit of Rs.53 lakh and this has slumped down big time from profit of Rs.4 crore declared in Q3Fy14 and Rs.5 crore in current Q2. Not just net profit, even the topline has declined from Rs.70 crore (YoY) and Rs.85 crore (QoQ) to Rs.66 crore. And it is not even as though the company has a small equity base – capital stands at Rs.23.58 crore and reserves is at Rs.81 crore. Post the 1:1 bonus, equity will bloat up to Rs.47.16 crore. Its net profit for 9MFY15 was at Rs.13 crore  while it had ended FY14 with a net profit at Rs.21 crore. So clearly, it will end current fiscal on a much lower note despite which there is a bonus.