Technical Check: This specialty chemical company up nearly 50% in 2021; looks poised to cross Rs 4,000 in 6 months

Fine Organic Industries Ltd rose by about 50 per cent so far in 2021 compared to nearly 22 per cent upside seen in the Nifty50 in the same period.

The stock consolidated in a narrow range in May to November period on the weekly charts. Strong price action seen on 15 November with strong volumes triggered a strong breakout that could take the stock price above Rs 4000 levels in the next 6 months, suggest experts.

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The company with a market capitalization of more than Rs 11,000 crore hit a fresh 52-week high of Rs 3885 on 26 November, and experts feel that the momentum is likely to continue that could take it towards Rs 4350 in the next 6 months that translating into an upside of over 18 per cent from Rs 3661 recorded on 26 November.  

Fine Organic is the largest manufacturer of oleochemical-based niche additives in India. It is amongst the six largest global players in polymer additives and among leading global players in specialty food emulsifiers.

Fine's client/customer base includes companies like Coca-Cola, Britannia, Asian Paints, Parle, Pidilite, Berger Paints etc. No individual customer accounts for more than 5% of revenue.

Fine Organic’s product portfolio comprises over 400 products including food additives, polymer additives, emollients for cosmetics, additives for rubber & elastomers.

Experts suggest that the demand for oleo-chemicals are increasing as they are green additives and environment friendly.

Technically, the stock price is in a long-term uptrend forming a higher top and higher bottom on the weekly chart i.e. each new high after the up move is higher than previous high and similarly each new low after a decline is higher than previous low.

“Over the last six months stock has consolidated between 2750 and 3570 odd levels to form a base for next of leg of the rally. It has given breakout on strong momentum and high volumes indicating buy participation in the stock,” Ashish Chaturmohta, Director, Equity Research at Sanctum Wealth, said.

“Thus, the stock can be bought at current levels and dips to 3630 with a stop loss of 3470 for the target of 4350 in the coming 6 to 9 months,” he said.

Disclaimer: The views/suggestions/advice expressed here in this article are solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.