Tech Mahindra shares surged 7% to Rs 1,764.30 on Oct 16 after Q2 profit jumped 32.7% and the board announced a 1:1 bonus issue.

Tech Mahindra Limited told exchanges on Thursday, 15 October, that its board has declared an interim dividend and recommended free shares, announced with its September quarter results.

The dividend is Rs 15 for every share held. Investors need to own the shares before the record date of 23 October to qualify, and payment is due by 13 November.

The free shares come through a 1:1 bonus issue. Put simply, an investor holding 100 shares would end up with 200 once the plan goes through.

The share price adjusts after that, so the value of the holding does not change on its own.

Shareholders must still approve the proposal, and the company will announce the bonus record date later.

To make room for the new shares, the board also proposed lifting authorised share capital from Rs 924.3 crore to Rs 1,000 crore. This is the first bonus since March 2015.

The payouts come on the back of a solid quarter. Net profit was Rs 1,586 crore, up 32.7% from the same period last year, while revenue grew 15.6% to Rs 16,180 crore.

Operating profit before interest and tax, known as EBIT, rose 40.5% to Rs 2,387 crore.

That is a margin of about 14.8%, meaning more of each rupee of sales turned into profit.

Shareholders also received a dividend of Rs 36 per share earlier this year, with 3 July as the cut-off date, NSE data shows.

Over one year the stock has gained 20.51%, and it is up 9.72% since January. The 52-week high of Rs 1,854 came on 3 February.

At 10:03 am, Tech Mahindra shares are trading at Rs 1,764.30 on NSE, up Rs 114.30 or 6.93% from Thursday’s close of Rs 1,650. The stock opened at Rs 1,712 and has stayed above its early low of Rs 1,690.10.

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