This chemical stock surges 37% in two sessions, 60% in one month; do you own it?

Shares of specialty chemicals maker Ishan Dyes & Chemicals rallied as much as 20% to hit an intraday high of ₹166 on Wednesday amid heavy volumes. The stock has surged 37.5% in the past two sessions after ace investor Shankar Sharma acquired a significant stake in the company via open market transactions on the BSE.

As per the BSE bulk deals data, Shankar Sharma purchased 7 lakh equity shares, or 4.4% stake, in Ishan Dyes at an average price of ₹121.71 per share. Besides, Standard Greases & Specialities also brought 1 lakh shares at ₹123 per share.

However, promoter Piyushbhai Natvarlal Patel sold 20 lakh equity shares, or a 12.52% stake, in Ishan Dyes at ₹123.83 per share. Total promoter shareholding in the company as of the December quarter stood at 58.52%, including 24.86% shares owned by Patel.

The smallcap stock, with a market capitalisation, of ₹257 crore, traded higher than 5-day, 20-day, 50-day, 100-day, and 200-day moving averages.

On Wednesday, Ishan Dyes shares opened higher at ₹161 against previous close price of ₹138.50 amid spurt in volume trade. During the day’s trade so far, the stock gained as much as 19.85% to touch a 52-week high of ₹166. On the volume front, 13.83 lakh shares worth ₹22.26 crore changed hands over the counter as compared to two-week average volume of 4.74 lakh scrips.

The company manufactures copper phthalocyanine crude Blue (CPC Blue) and pigment blues which are used widely in textile units to color the yarn and used in printing. Its shares rose 62% in past one month and 67% since the beginning of this year (year-to-date basis). The stock has delivered returns of 85% in 6 months and 200% over the past one year.

For the third quarter ended December 31, 2021, the company posted net profit of ₹5.04 crore, up 9% against ₹4.62 crore in the year ago period. However, total income dropped 36% to ₹15.85 crore in Q3FY22, as compared to ₹24.76 crore during the quarter ended December 31, 2020.

During the 9-month period ended December 2021, net profit grew by 21.4% to ₹11.32 crore as against ₹9.32 crore for the corresponding period last year. Total income rose marginally by 1.4% to ₹56.62 crore as compared to ₹55.85 crore during the 9-month period ended December 31, 2020.

Earlier this month, the company in an exchange filing said that its factory in Gujarat has become fully operational and stabilised and is expected to start yielding favorable results.

“Taking note of the various available business opportunities in the chemical sector in India, in which your company operates, the management of the company has charted out a growth plan and also decided to embark upon further expansion plans. The... vision of management to expand and diversify into new product ranges will be synergising its present business and also placing the company into an accelerated trajectory of the next level of the business growth,” Ishan Dyes said in a release on February 3.

Going forward, the company plans to invest around ₹100 crore in the next few years into new projects which will also support the Atmanirbhar Bharat initiative. The new projects will accelerate to increase the revenue and profitability for the company during the forthcoming years, the release added.