Himadri Speciality surges 11% on heavy volumes; zooms 40% in one week

Shares of Himadri Speciality Chemicals (HSCL) surged 11 per cent to Rs 84.10 on the BSE in Friday’s trade on the back of heavy volumes. In comparison, at 12:22 pm,  the S&P BSE Sensex was up 0.38 per cent. The stock has zoomed 40 per cent in the last one week. It had hit a 52-week high of Rs 85.50 on April 5, 2022.

At the time of publishing, it was trading 10 per cent higher at Rs 83 as trading volumes jumped 4 times. A combined 48 million equity shares representing 11.5 per cent of total equity of HSCL had changed hands on the NSE and BSE.

In the past six months, HSCL has outperformed the market by surging 75 per cent, as compared to a 9 per cent decline in the S&P BSE Sensex. However, in the last three years, the stock was down 19 per cent, against a 40 per cent rally in the benchmark index. It had hit a record high of Rs 197 on January 15, 2018.

The company is primarily engaged in the manufacturing of carbon materials and chemicals. The company has operations in India and caters to both domestic and international markets.

The company also has a wholly owned subsidiary in the name of AAT Global Limited, incorporated in Hong Kong and a step-down subsidiary with a 94 per cent shareholding in the name of Shandong Dawn Himadri Chemical Industry Ltd, incorporated in China.

HSCL has a strong market position in the domestic coal tar pitch and carbon black businesses. It has the largest market share in coal tar pitch business and the third largest market share in the carbon black business. Further, it has an established track record of more than two decades in coal tar pitch manufacturing and more than a decade in carbon black manufacturing.

HSCL has not yet declared its financial results for the quarter and year ended March 2022 due to surge of coronavirus (COVID-19) in China.

“Due to the current surge of coronavirus (COVID-19) in China, preparation of the results of Shandong Dawn Himadri Chemical Industry Ltd, situated in China has not been completed despite the company taking adequate steps within its control,” HSCL had said in an exchange filing on May 24, 2022. The company sought extension of time till July 15, 2022 for submission of the financial results.

For the nine months ended December 2021 (9MFY22), HSCL’s consolidated net profit almost halved to Rs 24.46 crore from Rs 47.27 crore in 9MFY21 due to weak operational performance. The company’s revenue from operations declined 34 per cent to Rs 1,114 crore from Rs 1,679 crore.

The run up in commodity prices had impacted the profitability. The company is expected to renegotiate its supply contracts with certain key customers, which should improve the profitability going forward.

According to a Bloomberg report, China’s Ministry of Finance is considering allowing local governments to sell 1.5 trillion yuan ($220 billion) of special bonds in the second half, an unprecedented acceleration of infrastructure funding aimed at shoring up the country’s beleaguered economy. CLICK HERE FOR FULL REPORT