VST Industries shares surge 3% in weak broader market; here's why

Shares of VST Industries surged as much as 3.4% to hit an intraday high of ₹3,816 on Tuesday amid report that ace investor and D-Mart founder and chairman Radhakishna Damani bought additional 1.51% stake or 2.33 lakh shares of the company on April 15. Meanwhile, HDFC Mutual Fund has also reportedly sold 3.3 lakh shares or 2.15% stake in the company through open market deals on April 15, thus bringing down its stake from earlier 5.84% to 3.69%.

With the latest purchase, Damani now holds a 34.4% stake in VST Industries, which manufactures cigarettes. Damani, who is the second largest shareholder in VST Industries via his investment firms Bright Star Investments Ltd and Derive Trading and Resorts Pvt, held a 32.89% stake in the company earlier. In January this year, Damani reportedly bought a 1.44% stake in the company.

The scrip opened higher at ₹3,762.20, up 1.95% as against the previous closing price of ₹3,689.90. At 12:22 pm, the share price of the company was trading 1.42% at ₹3,742.15. In contrast, the broader BSE Sensex was trading 462.37 points, or 0.64%, lower at 72,929.

Driven by surge in buying, VST Industries’ market capitalisation rose to ₹5,779 crore, with 3,786 shares exchanging hands on the BSE, as against the two-week average of 0.44 lakh shares. 

The share price of VST Industries touched a 52-week high of ₹4,328.45 on January 3 this year, whereas it touched a 52-week low of ₹3,159.90 on October 26 last year. In the past one month, three months and one year, the counter has risen 3.52%, 3.26% and 14.51%, respectively. In the year-to-date period, the counter has climbed 10.46%.

Formerly known as Vazir Sultan Tobacco Company Limited, VST Industries has a manufacturing facility at Hyderabad and Toopran (Telangana) and its principal activities are the manufacture & sale of cigarettes and unmanufactured tobacco.

In the October to December quarter of FY24, the company reported a 32% decline in its profit to ₹53.72 crore, as against ₹78.98 crore in the same period last year. The company’s revenue from operations during the quarter under review stood at ₹467.68 crore, witnessing a growth of 6%, as against ₹441.58 crore in the same period last year. The company’s total income during the quarter under review stood at ₹477.14 crore as against ₹457.95 crore.

The company is yet to announce financial results for the March quarter of FY24.