This company becomes first Indian manufacturer of Ester Molecule; stock jumps 12%

Savita Oil Technologies became the first Indian lubricant company to manufacture the Ester molecule. The stock jumped 12 per cent and hit its all-time high of Rs 549 in Tuesday's trading session. It has recovered over 100 per cent from its 52-week low of Rs 265.

The Ester molecule is biodegradable and hence sustainable as compared to regular base oils which are not biodegradable. After a long trailing and testing the product on pilot scale since 2015, Ester plant was successfully commercialised in August 2023, the company said.

The company informed that the Ester molecule is also being currently tested and piloted in some new age applications like EV Cooling for two and three-wheeler electric vehicles (EVs).

"Immersion Cooling is a rising technology for cooling data centres and the company is exploring the application of this molecule for Immersion Cooling of data centres. Immersion Coolants are currently a 400m $market today but expected to grow to 2b $ by2031, with growth in energy storage and data centres," it added.

Recently, SBI Mutual Fund acquired a 3 per cent stake, equivalent to 20.73 lakh shares, in Savita Oil Technologies through a block deal. The seller was Mehra Syndicate, one of the promoter entities.

HDFC Securities has a 'Buy' rating on the stock and believes that the company has a balanced product portfolio with an increasing proportion of its white oils and lubricating oils business. It added that a sustained growth in performance of its key business segment of transformer oils along with longstanding client relationships, should support topline growth.

Savita Oil Technologies is also the only global manufacturer of mineral, natural and synthetic ester-based transformer oils. These oils are used as an insulating and cooling medium in distribution transformers, power transformers and instrumentation transformers.

The small-cap stock is up over 50 per cent in 2024 so far and has delivered over 95 per cent return in the last 12 months.