Sigachi Industries soars amid sharp spike in volumes

Sigachi Industries jumped 12.12% to Rs 308.50 amid large volumes.

On the BSE, over 1.29 lakh shares of the company were traded in the counter so far as against an average trading volume of 7508 shares in the past two weeks.

On the NSE, over 16.24 lakh shares of the company had changed hands in the counter as compared with an average trading volume of 0.79 lakh shares in the past three months.

On the technical front, the stock's daily RSI (relative strength index) stood at 68.788. The RSI oscillates between zero and 100. Traditionally, the RSI is considered overbought when above 70 and oversold when below 30.

On daily chart, the stock is trading above its 50-day, 100-day and 200-day simple moving average (SMA) placed at 275.95, 275.62 and 274.95, respectively.

In an exchange filing made yesterday, Sigachi Industries said that a meeting of the board of directors of the company will be held on Tuesday, 10 January 2023, to consider a proposal of raising funds by way of issue of equity or convertible warrants on preferential basis to the promoters and non-promoters, subject to the receipt of necessary approvals / permissions.

Separately, the company has announced that CARE Ratings has reaffirmed its rating on the debt instruments of Sigachi Industries at CARE A- /CARE A2.

CARE Ratings said that the reaffirmation in the rating assigned to the bank facilities of Sigachi Industries continues to derive strength from the proven track record, vast experience of the promoters with qualified management team, integrated and accredited manufacturing facilities, strong network base, favourable location of units, satisfactory financial risk profile, adequate liquidity and stable industry outlook.

The ratings strengths are however tempered by modest scale of operations, high dependence on import for raw material and margins are susceptible to fluctuation in raw material prices, project implementation risk and elongated operating cycle.

Telangana based Sigachi Industries is engaged in manufacturing of microcrystalline cellulose (MCC), which is widely used in pharmaceutical, food, beverage, cosmetic and paint industry. The most common uses of MCC are in vitamin supplements and tablets. It also acts as a bulking agent in food production. MCC is produced from refined wood pulp which is imported by the company.

The company had reported 37.73% jump in consolidated net profit to Rs 13.58 crore on a 44.18% increase in sales to Rs 82.47 crore in Q2 FY23 over Q2 FY22.

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