Rs 12/Sh Dividend Record Date In July: BUY Chemical Stock For Rs 580 Target, 17% Potential Upside: Prabhudas

Leading manufacturer of soda ash in the country, GHCL Ltd is recommended to buy before turning ex-dividend for Rs 12 dividend per share. Brokerage Prabhudas Lilladher is the latest to like GHCL shares. The brokerage sees a 17% potential upside in GHCL.

In its latest research note, Vaishali Parekh, Vice President - Technical Research at Prabhudas Lilladher said, "The stock has recovered from the low made near 434 zones and has recently formed a double bottom pattern taking support near 475 zones."

The analyst added a pullback witnessed has improved the bias with the RSI which is also indicating a trend reversal to signify strength and can carry on with the positive move further ahead.

She added, "Currently, with risk-reward looking favourable, we suggest buying the stock for an upside target of Rs 580 while keeping the stop loss of Rs 470."

GHCL Limited was incorporated on the 14th of October 1983 and is the largest manufacturer of Soda Ash at a single location in the Country.

In the Chemicals sector, the company manufactures Soda Ash (Anhydrous Sodium Carbonate), a major raw material for detergents, glass & ceramics industries and Sodium Bicarbonate (baking soda). The company has a Soda Ash manufacturing plant at Sutrapada in Gujarat with an installed production capacity of 12 Lakh MTPA and is in the process of expanding it by another 500 Thousand MTPA by the end of 2025. GHCL Soda Ash is available in two grades -light and dense grade and is marketed in India under the brand name 'LION'. GHCL also has lignite mines at Khadsaliya in the Bhavnagar district of Gujarat to supply the raw material needed for the production of Soda ash. GHCL also produces around 0.12 MTPA of Sodium Bicarbonate which is an important raw material for industries like bakery, pharma, fire extinguisher manufacturing, cleaning agents etc.

GHCL Share Price:

On June 7, 2024, the stock stood at Rs 495.65 apiece, up by 3.21% on BSE with a market cap of Rs 4,746.09. The stock is near its 52-week low of Rs 4,746.09 apiece, while its 52-week high is at Rs 659 apiece.

Last week, the stock dipped by 1.3%. While year-to-date, the stock is down by 18.30% on BSE. In a year, the stock's performance is marginally up by 1.4%.

GHCL Dividend:

The company recommended a Dividend of Rs. 12.00 per equity share of Rs. 10/- each i.e. 120 % on the paid-up equity capital for the financial year ended March 31, 2024. The dividend will be paid on or after July 8, 2024, if approved by the members in the ensuing Annual General Meeting.

The record date for the dividend payout is July 1, 2024, which is also its ex-dividend date. This will be the first dividend payout of 2024.

Last year, the company delivered its highest-ever dividend of Rs 17.50 per share for FY23.

Currently, it has a dividend yield of 3.53%.

GHCL Earnings:

FY24 revenue dropped to Rs 3,446.54 crore, compared to Rs 4,550.89 crore in FY23. PAT stood at Rs 793.90 crore, also lower from Rs 1,141.57 crore in the fiscal FY23.

Also, the company's board has approved a capital budget of approximately Rs 224 crore for FY25, including a bromine project of Rs 117 crore. Further, the board approved a greenfield project for soda ash's annual production capacity of 5.5 million tons in Kutch, Gujarat for Rs 4,000 crore.