Near 52W Low Debt-Free Stock Declares One-time Special Dividend For FY24: Buy/Sell?

A major player in the agrochemical and pesticide industries is Sumitomo Chemical India Ltd. Products for crop protection, grain fumigation, rodent control, bio pesticides, environmental health, professional pest control, and feed additives are manufactured, imported, and marketed by Sumitomo Chemical India Ltd. (SCIL) for use in India. Africa and a number of other global regions. As per the data of Trendlyne, Sumitomo Chemical India is a debt-free company which is trading near its 52-week-low level at Rs 379.05 apiece. The scrip reached its 1 year-low at Rs 371.00 on (03/11/2023).

Sumitomo Chemical India Dividend

"The Board of Directors has declared an interim dividend in the form of Special Dividend for the F.Y. 2023-24 of Rs 5 per equity share on 499,145,736 equity shares of Rs 10 each which will be paid on or after Tuesday, the 20 February, 2024. This month, the Company will enter its twenty-fifth year of incorporation. To commemorate the occasion of the Company entering its silver jubilee year, the Board has declared the Interim Dividend in the form of one-time Special Dividend.

It is to reiterate that the interim dividend declared by the Company is one-time Special Dividend. Payment of interim dividend will be made to the Members whose names stand on the Company's Register of Members, on Wednesday, the 14th February, 2024 and to the Beneficial Owner(s) as per the Beneficiary List at the close of business hours on Wednesday, the 14th February, 2024, provided by the National Securities and Depository Limited and Central Depository Services (India) Limited," said Sumitomo Chemical India in a stock exchange filing.

Sumitomo Chemical India Financials

On a consolidated basis, the company reported net sales of Rs 542.0 Cr in the quarter ended 31st December 2023 down by 28% YoY from Rs 753.0 Cr in the year-ago quarter.

On the operating level, its EBITDA reached Rs 65.8 Cr during the quarter under review down by 45% YoY from Rs 120.4 Cr in the same quarter of the previous fiscal whereas the EBITDA margin dropped to 12.1% which was 16.0% in the third quarter of FY23.

Sumitomo Chemical India said its consolidated net profit stood at Rs 54.7 Cr in Q3FY24 down by 40% YoY from Rs 90.5 Cr in Q3FY23.

Sumitomo Chemical India Share Price Target

Deven Mehata - Equity Research Analyst at Choice Broking said SUMICHEM, currently trading at 380 levels, exhibits a sideways to bearish trend on daily, weekly, and monthly charts, indicating a lack of strong upward momentum. Multiple resistances are observed in the range of 400-415, restricting significant price appreciation.

The stock faces substantial support at 370 levels, and a breach of this support could lead to a downward movement towards the next support at 340. The overall technical weakness is emphasized by the stock trading below crucial Exponential Moving Average (EMA) levels, suggesting a potential lack of bullish conviction.

Traders are advised to consider exiting the stock on any bounce near the 400 levels, as the resistance in that range may pose challenges for further upward movement. For investors who entered near the current market price, implementing a trailing stop loss at 370 is recommended to manage risk systematically and protect against potential losses.

In summary, the technical analysis for SUMICHEM points towards a cautious stance, with the stock facing resistances, displaying weakness on EMA charts, and having a significant support level that should be closely monitored. Traders and investors alike should exercise caution and stay alert to potential exit signals in line with the outlined technical factors.

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.