This small-cap petrochemical stock jumped 6 per cent today; do you hold it?

The company is the largest player in the private sector with over 25 per cent market share in domestic bitumen & bituminous products.

On January 17, the market traded in the green. The S&P BSE Sensex closed trading at 60,655.72, up 0.94 per cent, while NIFTY50 closed at 18,053.30, up 0.89 per cent. Regarding sectoral performance, power and utilities were outperformers, while consumer durables and healthcare were among the Top Losers. Talking about stock-specific action, Agarwal Industrial Corporation Ltd was among the Top Gainers in BSE group ‘A’.    

Shares of Agarwal Industrial Corporation Ltd closed trading at Rs 632.15, up by 6 per cent from its previous close of Rs 597.4. The stock opened at Rs 606.95 and made an intraday high and low of Rs 644.35 and Rs 604.5, respectively. The company has a market capitalisation of Rs 945 crore and belongs to BSE smallcap index.       

Agarwal Industrial Corporation Ltd is the largest player in the private sector with over 25 per cent market share in domestic bitumen & bituminous products. It is an integrated petrochemical company focussed on Bitumen. Bitumen is dense, highly viscous, petroleum-based hydrocarbon that is obtained as a residue during the distillation of crude oil and used in around 90-95 per cent of Indian roads. The company also acts as an infra-ancillary for the transport and logistics segment.    

The company, being an end-to-end solution provider, procures material from the international market and transports it through its charter and logistics thereby, providing all the services under one roof. Hence, the company has an edge over its peers as it holds the largest market share.  

The expectation of strong growth in infrastructure activity and the company’s Capex in additional vessels is likely to lead the next leg of growth. Considering the company’s strong market share in the recession-resistant bitumen industry, the future outlook for the company looks attractive.  

Regarding the shareholding pattern, the promoters own 62.15 per cent ownership in the company, non-institutional investors hold 34.28 per cent and the remaining 3.57 per cent is by FIIs. There are no promoter-pledged shares.    

The stock is trading at a PE multiple of 16.15x. The scrip has a 52-week high and low at Rs 745.7 and Rs 405.3, respectively.