Robust debut: Heranba Industries trades at 33.5% premium, what should you do?

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Shares of agrochemical player Heranba Industries made a robust market listing on Friday. The stock opened for trading at Rs 900 on the National Stock Exchange, compared to the issue price of Rs 627, marking a premium of 43.5%. On the BSE, the stock listed at the same levels.

In afternoon trades, the share was quoting at Rs 838.80 gaining 33.5% up by Rs 208.60. It made an intraday high of Rs 944.45 and a low of Rs 805.20 on BSE.

Saurabh Joshi, Equity Research Analyst at Marwadi Shares and Finance suggested investors to stay invested in the company as it can witness strong topline growth going ahead on the back capex incurred over the past two to three years. “In H1FY21 the EPS posted is at 17 which if annualized will result in EPS of 34 for FY21. Looking at the robust future performance, robust demand, and fair valuation on a forward basis,” said Joshi.

Incorporated in 1992, Heranba Industries manufactures intermediates, technicals and formulations. It is one of the leading domestic producers of synthetic pyrethroids with a market share of 19.5% in 2019. Its pesticides range includes insecticides, herbicides, and fungicides.

Hemang Jani, Head Equity Strategy of Motilal Oswal Financial is also quite upbeat on the company and said, “the export demand for Heranba’s product would continue to be strong the shutdown of several chemical plants in China, would result in higher volumes of Pyrethroids being exported out of India. It has 371 registrations in the international market along with 172 pending approval. Further, the company is in the process of developing 2 products of Fungicides, 2 products of Herbicides and 1 product of Insecticides, for exclusive sale to the European markets.”

On the other hand, Astha Jain of Hem Securities suggested booking partial profit in Heranba at the current level and to hold the remaining quantity for long term as the company is one of the leading domestic producers of synthetic pyrethroids has shown strong financial performance.

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