Kamdhenu Ventures shares hit upper circuit for second straight session

Shares of Kamdhenu Ventures (Kamdhenu Paints) on Wednesday hit their upper circuit level for the second straight session. The stock jumped 4.99 per cent to hit a day high (upper price band) of Rs 187.40 over its previous close of Rs 178.50. Kamdhenu Ventures got listed at BSE and NSE on Tuesday. Kamdhenu Ventures is the demerged paints business arm of Kamdhenu Ltd. Under the demerger, parent firm Kamdhenu Ltd issued one equity share of Kamdhenu Ventures against every existing share of the parent company.

The company, in an exchange filing, said, "The new business structure affirms the group's focused approach towards the paints business. The demerger will lead to operational flexibility and facilitate businesses to independently pursue their growth plans through organic & inorganic routes."

Satish Kumar Agarwal, Chairman of Kamdhenu Group, said, "With a wide presence and substantial network across India, the company aims to strengthen its foothold in the paint industry. For FY22, paints revenue stood at Rs 241 crore and is expected to reach a turnover of Rs 1,000 crore in next five years on account of increased discretionary spend, urbanisation and positive macro tailwinds."

To enhance pan-India foothold, the company said it would be aggressively spending on advertising and promotions. It would focus on urban markets through institutional sales and enhanced sales penetration, Kamdhenu Ventures added.

AR Ramachandran from Tips2trades said, "Kamdhenu Ventures now will have resistance at Rs 201 on the daily charts. Investors can keep booking profits at current levels or keep a strict stop loss of support of Rs 171."

On the flip side, Kamdhenu Ltd, Kamdhenu Ventures' parent, traded flat at Rs 433.10 in late deals today. Around 46,000 shares changed hands today on BSE, which was slightly higher than Kamdhenu Ltd's two-week average volume of 45,000 shares. Turnover on the counter stood at Rs 2 crore, commanding a market capitalisation (m-cap) of Rs 1,166.58 crore.

"Kamdhenu Ltd looks bearish on the daily charts with a strong negative divergence. Investors should book profits in buy positions at current levels and wait for a fall till Rs 375 to initiate fresh buy positions," Tips2trades' Ramachandran said.

The stock was last seen trading higher than 5-day, 20-, 50-, 100- and 200-day moving averages.

The counter's 14-day relative strength index (RSI) came at 74.09. A level below 30 is defined as oversold while a value above 70 is considered overbought. The company's stock has a negative price-to-equity (P/E) ratio of 37.22.

Kamdhenu Ltd has a one-year beta of 1.12, indicating high volatility on the counter.

The company has its paint manufacturing plant at Chopanki in Rajasthan where it makes interior and exterior emulsions, stainers, colourants, designer paints, construction chemicals, waterproofing chemicals and other water-based specialty products.

It also outsources medium- and low-range products like distempers, enamel and putty from manufacturing units in Rajasthan, Uttar Pradesh, Haryana and Punjab.

Meanwhile, Indian equity benchmarks fell sharply today, dragged by banks, financials and energy stocks.

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