This Ashish Kacholia-owned money spinner turned Rs 10,000 to Rs 11 lakh in 10 years
Shares of speciality chemical company Fineotex Chemical have offered jaw-dropping returns to investors in the last 10 years, rising 10,837% in the said period.
Accordingly, if an investor had invested Rs 10,000 in the stock 10 years ago and stayed put, the investment would have swelled to nearly Rs 11 lakh, according to an analysis by ET
Markets.
Fineotex Chemical was just a penny stock at Rs 2.35 in May 2013 with a market cap of Rs 26 crore.
The stock has since risen multifold to Rs 256 levels currently.
Most of the heavy lifting was done in the last three years, as the stock has surged 1,300% during this period. In the last five years, it gave returns of 250%.
Fineotex Chemical, a smallcap company with a market capitalization of about Rs 2,800 crore, makes specialty chemicals and enzymes for various industries, such as textile and garment, construction and others.
The company also produces adhesives used in the wood and paper industry.
It has an EPS of 4.32 on a trailing twelve month (TTM) basis and the stock is currently trading at a PE of 58.92.
According to the latest shareholding pattern available with the exchanges, promoters own the majority of the stake at 65.03%, while the rest of 34.97% lies with the public shareholders.
Among the public shareholders, mutual funds have 3.65% stake, while foreign investors hold no stake.
Retail investors have a combined holding of nearly 28% in the company.
Ace investor Ashish Kacholia has a 2.82% holding in the firm, shows March quarter data.
Fineotex Chemical has seen its sales grow manifold from just Rs 96 crore in FY13 to Rs 368 crore in FY22. Meanwhile, profit after tax (PAT) too surged from just Rs 8 crore to nearly Rs 57 crore in the same period.
For the nine months ending December period, the company’s revenue increased 54% year-on-year to Rs 379 crore, while EBITDA stood at Rs 79.8 crore.
Meanwhile, PAT rose to 59% to Rs 63 crore, compared with Rs 39.8 crore in the same period the previous year.
Technical outlook: What should investors do?
After an impressive surge from Rs 12 to Rs 400 within a span of less than three years, the stock entered a corrective phase and is currently consolidating in the well-defined trading range of Rs 200-280.
During the correction phase, the stock attempted to establish a support level around the Rs 200 mark, which represents a 50% retracement of the previous rally.
However, the stock has encountered a significant obstacle in the form of the 200-day moving average (DMA) around Rs 280.
The 200-DMA holds crucial importance as a resistance level for the stock’s price movement,” said Santosh Meena, Head of Research, Swastika Investmart.
“To initiate a fresh round of upward momentum, it must successfully breach the 200-DMA. This breakthrough would signify a positive development for the stock and could potentially trigger another substantial rally.
On the other hand, if the stock fails to surpass the 200-DMA and experiences a decline below the Rs 200 level, it may undergo a significant correction,” Santosh Meena said.
Vaibhav Kaushik of GCL Broking says the stock can be bought at current levels with a stop loss of Rs 200 and a target of 400.
If it crosses the Rs 425 mark, then it can even touch Rs 750 levels in the coming quarters,” Kaushik said.
By:ET
