Bombay Burmah Trading Corporation locked in 20% upper circuit: Here’s why

Shares of Bombay Burmah Trading Corporation in Friday’s (October 20) trade were locked in the 20 per cent upper circuit at Rs 1,420.5 apiece on the BSE. On Thursday, shares of the packaged foods company closed at Rs 1,183.75 apiece.

“The formation of “Higher High, Higher Low” has triggered the next breakout in shares of Bombay Burmah Trading Corporation. Furthermore, the sustainability over the 200-weekly moving average (WMA) has led to a new 52-week high, post-delivering steady support for accumulation around Rs 1200 levels,” Avdhut Bagkar, derivatives and technical analyst at StoxBox, said while maintaining a bullish outlook on the counter.

“Technically, the stock is heading in the direction of Rs 1,600–1,560, where the next selling pressure may emerge. The price action has always witnessed an optimistic bias in the overbought territories, implying momentum to absorb major sell-offs,” he added.

Interestingly, both foreign institutional investors (FIIs) and DIIs have been increasing their stakes in the stock for the last few quarters. FII stake as of the September quarter stands at 8.27 per cent, while DII ownership is at 1.3 per cent. In comparison, in the quarter ended December 2022, FII ownership in the counter was at 7.82 per cent, while DIIs held a 1.2 per cent stake.

On the technical front, the stock’s day RSI is in the mid-range at 48.1. Further, the stock is currently trading above its 30-day, 50-day, 100-day, and 200-day SMAs, or simple moving averages.

Share price performance

Stock in the last one year has risen by 58 per cent, while its five-year return is at 16.4 per cent. However, in a decade’s time, the stock has given multibagger returns of a hefty 1,278 per cent.

Q1FY24 results

Net sales of the company during the Q1 FY24 period increased over 8 per cent year-on-year (YoY) to Rs 4,086.62 crore. However, net loss widened to Rs 156.06 crore, registering over a 5 per cent increase in comparison to Rs 164.77 crore posted during the same period last fiscal.

About Bombay Burmah Trading Corporation

Commanding an m-cap of Rs 9,911 crore, Bombay Burmah is engaged in providing tea, coffee, auto ancillary, and dental products. The company’s listed peers are Tata Consumer Products, Tata Coffee, CCL Products, and Rossell India, among others.