A stock is said to be ‘fundamentally strong’ when it portrays a specific set of characteristics such as consistent and improving financials, favourable leverage ratios, etc.
Listed below is one such fundamentally strong stock that is trading at a discount of up to 30 percent from its 52-week high level:
With a market capitalization of Rs 9,447.74 crores, the stocks of Anupam Rasayan India Limited are currently trading at Rs 878.
The company’s stock hit its 52-week high mark in May 2023 at a price of Rs 1,249.75. The current price levels indicates a discount of around 30 percent to its 52-week high level.
Digging into the financials reported by the company, the basic business indicators such as the operating revenues as well as the after-tax profits have consistently seen growth in the past few financial years.
The most recent movement in the operating revenues is from Rs 1,073.77 crores during FY21-22 to Rs 1,601.9 crores during FY22-23, and the net profits, during the same time period, rose from Rs 152.18 crores to Rs 216.85 crores.
In addition to the above, the profitability metrics have seen decent improvements with the return on equity (RoE) increasing from 9.24 percent during FY21-22 to 10.62 percent during FY22-23. The return on capital employed (RoCE) also increased from 11.27 percent to 13.03 percent during the same time period.
The debt-to-equity ratio of the company, one of the most popular leverage ratios to analyze, has reduced in the recent period with the latest movement being from 0.46 times during FY21-22 to 0.33 times during FY22-23.
On a contrasting note, the sequential performance of the company shows a decline in numbers due to sector-specific reasons pertaining to increased costs, in turn, affecting the margins.
The most recent data available for the quarter ended June 2023 exhibits the company’s Promoters holding a 60.77 percent stake and the Foreign Institutional Investors (FIIs) holding a 9.79 percent stake in the company.
Anupam Rasayan India Limited is involved in the business of custom synthesis as well as the manufacturing of specialty chemicals in India.
The company operates in various business segments including life science-related specialty chemicals comprising products in relation to pharmaceutical, personal care, agrochemical, and other specialty chemicals including dyes, pigments, etc.
Written by Amit Madnani
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