Shankara Building hits 52-week high; surges 42% in 2 weeks

On January 28, 2022, Crisil Ratings had reaffirmed its 'CRISIL BBB+/Stable/CRISIL A2' rating on the bank facilities and commercial paper

Topics
Buzzing stocks | Shankara Building Products | Market trends

Deepak Korgaonkar  |  Mumbai 

Shares of hit a 52-week high of Rs 705, gaining as much as 4 per cent on the BSE in Thursday's intra-day trade, in an otherwise subdued market. In comparison, the S&P BSE Sensex was down 0.18 per cent at 57,894 at 10:11 AM.

In the past two weeks, the stock of the building and home improvement products company has zoomed 42 per cent from Rs 498 levels. The stock had hit a record high of Rs 2,365 on December 5, 2017.

"There is no undisclosed/price sensitive information or any impending announcement / corporate action which need to be informed to the exchange at this point of time," said on Tuesday, February 15, 2022 on clarification sought on price movement.

On January 28, 2022, had reaffirmed its 'CRISIL BBB+/Stable/CRISIL A2' rating on the bank facilities and commercial paper of (Shankara; a part of the Shankara Buildpro group).

"The ratings continue to factor in the group's established market position and extensive experience of the promoter in the building material distribution and retailing businesses, the diversified product offerings, longstanding association with vendors, and moderate financial risk profile. These strengths are partially offset by susceptibility to economic cycles and sharp variation in raw material prices," said in its rationale.

Healthy relationships with suppliers such as JSW Steel, Tata Steel, Sintex Industries, Uttam Galva Steels, APL Apollo Tubes, Kajaria Ceramics, and Cera Sanitaryware etc enables the group to offer a diverse range of building materials, and provides a competitive edge, the rating agency added.

Technical View
Strategy: Buy on Dips
Support: Rs 640-660
Target: Rs 720

The recent 42 per cent rally has been backed by strong volumes, with the stock treading along its higher-end of the Bollinger Band on the daily charts. The key momentum oscillators like the Directional Index (DI), MACD and Slow Stochastic are in favour of the bulls. However, the RSI (Relative Strength Index) is in the overbought zone, thus mild profit-taking can be expected at the counter.

The near-term support for the stock is seen around Rs 660-640 levels, while, on the upside, the stock can rally up to Rs 720. The ideal strategy for the stock would be to buy on dips, closer to the support levels.

(Inputs from Rex Cano)

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First Published: Thu, February 17 2022. 10:46 IST
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