Himadri Speciality Chemical shares jump 6% to hit one-year high; here's why

Himadri Speciality Chemical Ltd shares rose sharply in Wednesday's trade to touch their one-year high level. The stock jumped 5.64 per cent to hit a 52-week high of Rs 307.10. At this price, the multibagger scrip has gained 282.92 per cent from its one-year low of Rs 80.20, a level seen earlier on February 27 this year.

Today's sharp rise in the share price came after the company's board said it has approved setting up of a manufacturing facility for production of lithium-ion battery components with total annual production capacity of 200,000 MT either directly and/or through its subsidiaries. The estimated project cost of this facility is kept at Rs 4,800 crore, in phases, over a period of five to six years.

This investment will be made largely from internal accruals and balance from debt, Himadri added.

The company believes that the facility will enable the indigenisation of lithium-ion battery raw materials for global and Indian electric vehicles (EVs). It also expected that the facility will reduce dependency on fossil fuels and contribute in preservation of natural resources.

Bourses BSE and NSE have put the securities of Himadri Speciality under the long-term ASM (Additional Surveillance Measure) framework. Exchanges put stocks in short-term or long-term ASM frameworks to caution investors about high volatility in share prices.

On technical setup, the counter was trading higher than the 5-day, 10-, 20-, 30-, 50-, 100-, 150-, 200-day simple moving averages (SMAs). The counter's 14-day relative strength index (RSI) came at 76.85. A level below 30 is defined as oversold while a value above 70 is considered overbought.

The company's stock has a price-to-equity (P/E) ratio of 38.97 against a price-to-book (P/B) value of 5.15.

Jigar S Patel, Senior Manager - Technical Research Analyst at Anand Rathi Shares and Stock Brokers, said, "For Himadri, support will be at Rs 270 and resistance may be found at Rs 330. One can expect a trading range between Rs 250 and Rs 350 in the next couple of months."

AR Ramachandran from Tips2trades said, "Himadri Speciality looks bearish and extremely overbought on daily charts with next resistance now at Rs 323. Investors should book profits at current levels as a daily close below support of Rs 285 could lead to a target of Rs 220 in the near term."

DRS Finvest founder Ravi Singh suggested that one can buy the stock for a target price of Rs 325, keeping a stop loss placed at Rs 296.

On BSE, around 2.30 lakh shares changed hands today at the time of writing this story. The figure was lower than the two-week average volume of 2.60 lakh shares. Turnover on the counter stood at Rs 6.94 crore, commanding a market capitalisation (m-cap) of Rs 13,321.68 crore.

There were 56,458 sell orders against buy orders of 44,278 shares.

Also read: Stock recommendations by market analysts for December 6, 2023: ITC, IDFC First Bank and Kotak Mahindra Bank

As of September 2023, promoters held 44.86 per cent stake in the company. Himadri is primarily engaged in the manufacturing of carbon materials and chemicals. It has operations in India and caters to both domestic and international markets.

(Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.)

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