Aarti Drugs shares rebound after hitting 52 week low

Shares of Aarti Drugs experienced a rebound on Monday after hitting their 52 week low level. The stock was trading 20 per cent higher at Rs 380.30 over its previous close of Rs 316.95. The scrip fell to its lowest one-year low of Rs 310.80 in intraday deals before the sharp rebound in share price. Nearly 93,000 shares changed hands on the BSE today, which was nearly five times more than the two-week average volume of 20,000 shares of Aarti Drugs. Turnover on the counter stood at Rs 3.27 crore and had a market capitalisation m-cap of Rs 3,521. There are 58 crore. There were 24,083 buy orders against sell orders of nil shares.

The counter traded 28.46 per cent lower than its 52 week high of Rs 531.60, touched on April 7 last year, at today's closing of Rs 380.30. It has declined by 16.16 per cent on a year-to-date basis.

The counter is facing a strong resistance at Rs 381.70 on the technical front, an analyst said. Aarti Drugs is facing strong resistance on the daily charts at Rs 381.70. The investors who bought at lower levels should keep their booking profits or keep a strict stop loss of support at Rs 353. The next resistance will be at 398, according to AR Ramachandran from Tips 2 trades.

The scrip has an average target price of Rs 490, Trendlyne data shows a potential upside of 33.06 per cent. It has a one-year beta of 0.62, indicating low volatility on the counter.

The stock traded higher than the 5 day and 20 day moving averages but was lower than the 50 day, 100 and 200 day moving averages. The 14 day relative strength index RSI came at 53.56. A level below 30 is defined as oversold, while a value above 70 is considered overbought. The company's stock has a price-to- equity P E ratio of 19.23.

As of December 2022, promoters held a 59.66 per cent stake in the company.

Aarti Drugs is part of the $900 million Aarti Group of industries. The company produces active pharmaceutical ingredients, APIs pharma intermediates, specialty chemicals, and other formulations with its wholly-owned subsidiary Pinnacle Life Science Pvt Ltd. Products under APIs include Ciprofloxacin Hydrochloride, Metformin HCL, Ketoconazole and Ofloxacin, while specialty chemicals include Benzene Sulphonyl Chloride and Methyl Nicotinate.

Aarti Drugs is looking forward to expanding its volumes, as it has been able to carve a niche for itself over the years. Consumer spending on medicines is expected to increase, with the government initiative to encourage private health insurance schemes, the company said. This will spur growth in the generic sector in the domestic market.

In a volatile trading session, Indian equity benchmarks settled lower today. The domestic indices were dragged down by metals, technology, automobile, financials and banks. The 30-share BSE Sensex pack plunged 361 points or 0.62 per cent to close at 57,629, while the broader NSE Nifty index moved 112 points or 0.65 per cent lower to settle at 16,988.