Share price of this specialty chemicals company has zoomed 38% in 3 days

In the past two weeks, the stock price of Jyoti Resins & Adhesives had zoomed 56 per cent, as compared to 2.5 per cent decline in the S&P BSE Sensex

Shares of Jyoti Resins & Adhesives hit a record high of Rs 1,260 on the BSE in Thursday’s intra-day trade, gaining as much as 38 per cent in past three trading sessions. In the past two weeks, the stock of this specialty chemicals maker had zoomed 56 per cent, as compared to 2.5 per cent decline in the S&P BSE Sensex.

At 12:16 pm; Jyoti Resins was trading 0.59 per cent lower at Rs 1,156.50, after hitting an intra-day low of Rs 1,115.10 on the BSE. In comparison, the Sensex was up 0.75 per cent at 57,360.

The BSE today said that the Exchange has sought clarification from Jyoti Resins & Adhesives Ltd with reference to significant movement in price, in order to ensure that investors have latest relevant information about the company and to inform the market so that the interest of the investors is safeguarded. The reply is awaited.

Currently, the stock is classified in the X category on the BSE. X group consists of all those stocks which are only listed on BSE. These securities are low to moderate market capitalization, lower contribution to overall trading turnover and relatively higher attention required to be devoted by the Exchange, from a regulatory due diligence and monitoring standpoint.

As on September 30, 2021, Jyoti Resins had total 4 million outstanding equity shares. Of these 48.98 per cent holdings were with the promoters, while 41.15 per cent stakes were with the individual public shareholders and others held the remaining 9.87 per cent stake in the company.

On Wednesday, December 22, 2021, ARK Global Emerging Companies LP purchased 50,000 equity shares representing 1.25 per cent of total equity of Jyoti Resins at price of Rs 1,172.59 per share. Gautam Khodidas Patel and others sold 50,503 shares at an average price of Rs 1,175.03 per share, the BSE bulk deal data showed.

Meanwhile, promoters of the company had purchased 24,851 equity shares of the company via open market between November 15, 2021 and December 8, 2021, the exchange data showed.

Jyoti Resins is a manufacturer of synthetic resin adhesives. The company manufactures various types of wood adhesives (white glue) under the brand name of EURO 7000. The company has steadily increased its plant (at Santej, Ahmedabad) capacity to 1000 tonnes per month, and is currently expanding its capacity by 50 per cent to 1500 TPM to meet growing demand for its product.

For July-September quarter (Q2FY22), the company reported a solid 98.3 per cent year on year (YoY) revenue growth at Rs 48.62 crore led by significant revival in demand post Wave 2 of Covid. Reported profit after tax, however declined 3.9 per cent to Rs 4.34 crore from Rs 4.52 crore in a year ago quarter.

Hardening of raw material prices due to supply disruptions and sharp increase in freight rates led to compression in gross margins, thereby impacting EBITDA margins by 670 bps YoY at 11.57 per cent. Price increases in Q3 will help reduce impact of raw material price increase, the company said in investor presentation.