Deshbandhu Polymar has witnessed an 88% stock price surge in just two weeks, closing at Tk 42 per share after announcing a potential merger with three entities. Despite announcing a less favorable 2.5% cash dividend for FY23 (half of the previous year’s payout), the stock jumped by 18% in a single trading session on October 3. Analysts suspect price manipulation behind this unusual price increase, a trend seen in bearish markets with small-cap stocks.
Deshbandhu Polymer’s financial performance shows modest earnings, with a profit of Tk 36.21 million for FY23, reflecting a 26% increase from the previous year, alongside earnings per share of Tk 0.59. The company’s price-to-earnings (PE) ratio stands at a high 71, significantly exceeding the market’s PE of around 15, signaling overpricing and increased risk for investors. The company plans to merge with three non-listed entities within the Deshbandhu Group, aiming to bolster its position, yet caution prevails among market observers due to the stock’s unusual surge.
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