Already more than double in a year, this specialty chemical stock may have more juice left. Heres why
Styrenix Performance Materials (SPML) stock has delivered 111% returns in a year. HDFC Securities is bullish with a 16% upside target. Learn about the company's growth plans, financials, and analyst recommendations.
Specialty chemical manufacturer Styrenix Performance Materials' shares have more than doubled in just a year, and counting. The Styrenix Performance Materials Ltd (SPML) stock has surged Rs 1,683 apiece on BSE, as of May 14, all the way from Rs 805 apiece a year ago.
Domestic brokerage HDFC Securities is bullish on the smallcap stock with targets price of Rs 1,836 and Rs 1,972 from a perspective of the next 2-3 quarters, which imply an upside of as high as 17.2 per cent from the current levels.
SPML plans to improve ABS capacity from 85,000 MTPA to 1.05 lakh MTPA over the next year through various de-bottlenecking activities and further increase capacities from 1.05 lakh MTPA to 2.1 lakh MTPA in the subsequent 36 months, according to the brokerage.
The company is likely to register a 13.4 per cent compound annual growth rate (CAGR) in revenue and 17.5 per cent in net profit along with an operating margin of around 12-13 per cent over the FY24-26E period, HDFC Securities analysts wrote in a report dated May 13.
Why is HDFC Securities bullish on SPML shares?
The brokerage is positive on the specialty chemical maker citing the following as key erasons
- A strong balance sheet
- A large capex program
- A wide customer base across industries
- A robust dividend policy
HDFC Securities also suggests adding more of SPML shares in the portfolio on dips to Rs 1,496.
SMPL Share Price: Past performance
As of May 14, 2024, the BSE reported that the stock closed at Rs 1,683. During the intraday trading session, it reached a high of Rs 1,699. Meanwhile, the Nifty50 index yielded a return of 20.74 per cent during the same period. Additionally, the stock's PE ratio is 17.09.
The SMPL produces two special chemicals that are Acrylonitrile butadiene styrene (ABS) and Styrene acrylonitrile (SAN).
What are ABS and SAN?
ABS is used in industries such as electrical and electronics, automotive, household consumer durables, and information technology, while SAN is mostly used in the stationery, cosmetics, packaging, toys, and extrusion segments.
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