Momentum Trading: Specialty Chemical Stock Near 52W-High; Buy Before It Gets Expensive?

Laxmi Organic Industries Ltd. provides a wide range of speciality ingredients and solvents to a variety of end-market industries, including food packaging, agrochemicals, pigments, and coatings. With a market valuation of Rs 8,504.34 Cr, the speciality chemical stock closed Friday on the BSE 2.04% higher at Rs 307.50 a share, moving inching closer to its new 52-week high. The scrip reached a 52-week-low of Rs 220.00 on (04/06/2024) and a 52-week-high of Rs 319.35 on (07/09/2023).

Laxmi Organic Industries Share Price Target

Axis Securities has picked up the specialty chemical stock Laxmi Organic Industries as momentum buying and hence recommended buying the stock in a range of Rs 298-290, for a target price of Rs 336-345 in a time frame of 3-4 weeks.

As per Axis Securities, LXCHEM demonstrated a decisive breakout above the Descending Triangle pattern at 290, confirmed by a robust bullish candle on the weekly chart, signaling the beginning of a medium-term uptrend. The stock has broken above the weekly upper Bollinger Band. This breach generates a buy signal, indicating potential upward Momentum. The stock's ability to maintain levels above key short and medium-term moving averages (20, 50, 100, and 200 days) signals a positive bias in its trajectory. The weekly Relative Strength Index (RSI) is holding above its reference line indicating a positive bias. The weekly RSI shows a bullish divergence, with the RSI recording higher highs and lows while the price exhibits similar highs and lows, generating a buy signal. Following the breakout from the pattern, the stock is expected to rally towards previous swing highs, with targets set at 3550-3685.

Management Commentary

Dr Rajan Venkatesh - MD & CEO says, "On a standalone basis, we are happy to report a comparable sequential performance and growth year on year in Q1FY25, taking out one-off effect in Q4FY24 and despite a scheduled plant turnaround in Essentials Q1FY25, which reduced the volume output. The performance was positively impacted by our focused operational excellence drive and product mix in Specialties."

"Key assets at our Fluoro-intermediates site at Lote are now operational and we have already dispatched multiple product samples to key customers encompassing a range of industries. This gives us confidence to develop this business and further expand our Specialties product offerings. At our Dahej project key approvals are falling in place and construction has started. We remain committed to 'Geared to Win' and 'Geared for Growth' to create long-term value for all stakeholders," he further added.

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.