Specialty Chemical Stock Jumps Over 9% To Hit Upper Circuit: Buy/Sell Or Hold

A small-cap company in the specialty chemical industry has the name Vikas Ecotech Ltd. Vikas Ecotech is a prominent global supplier of premium speciality chemicals to clients worldwide. For the demands of the worldwide industry, the firm produces a comprehensive range of high-quality, environmentally friendly rubber-plastic compounds and additives. Vikas Ecotech's shares began 9.37% higher on Monday at the upper circuit limit of Rs 3.50 per share. The rise in the company's stock price followed a number of growth-related actions it took during the last week.

According to the company's reveal, Vikas Ecotech received orders for the specialised polymer compounds on Friday totalling Rs 22.5 crore. The orders will be fulfilled by February 15, 2023, at the latest, during the following 30 to 45 days. With these orders from the specialised polymer compounds business vertical, the firm will have generated about Rs 100 crore in revenue so far in the current fiscal year. Looking ahead, the company anticipates receiving further orders to capitalise on the forthcoming seasonal export period that runs from January to March 2024.

The company said in a separate exchange filing that its promoter, Vikas Garg, has converted 3.5 crore convertible warrants into 3.5 crore equity shares. The conversion required a total payment of Rs 8,92,50,000, which equates to Rs 2.55 per warrant or 75% of the issue price.

Last week, on Wednesday, the company announced that it had paid off its Rs. 119 crore loan. According to a statement from Vikas Ecotech, the latest debt repayment brings the company's outstanding debt down to Rs 42.5 crore. The firm hopes to be debt-free by the end of FY 2023-2024 after this development.

On Monday, the shares of Vikas Ecotech closed 9.88% higher at Rs 3.56 apiece level. The scrip reached a 52-week-high of Rs 5.09 on (12/09/2023) and a 52-week-low of Rs 2.38 on (28/03/2023).

Vikas Ecotech Share Price Target

Vikas Ecotech is small cap and considered in penny stock (high risk and rewards type of stock), at monthly time trade is in an oversold zone as per the RSI. however, at the daily time frame risk takers investors may bet on it as currently it's forming a bottom nearly 2.80 to 3 price level and its Daily RSI is nearly 54.

A breakout is possible in the coming days if its next hurdle of 3.60 gets breakout. One who is looking to invest in such stocks should keep exposure limited so they can hold their long-term view. If the price keeps sustaining above the 3.60 range then we could see it chasing a 4 to 10 price journey.

And for multifold gains, the most ideal stop loss should be at 1.60 which is almost half of the current price. And if you're planning to take the risk, take it wisely, suggested VLA Ambala, SEBI Registered Research Analyst and Co-Founder of Stock Market Today (SMT).

Disclaimer

The recommendations made above are by market analysts and are not advised by either the author, nor Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.