Rs 180 to Rs 399: This speciality chemicals stock doubled shareholders’ wealth in a year

 An investment of Rs 1 lakh in this stock last year would have turned to Rs 2.2 lakh today.

Laxmi Organic Industries Ltd, one of the S&P BSE 500 companies, has given its investors exceptional returns during the last one year. While the company got listed in March last year, its share price jumped from Rs 180.95 on 1 April 2021 to Rs 399.5 on 31 March 2022, giving returns of 120.77% YoY.

These returns are 4 times the gains made by the S&P BSE Basic Materials Index, of which the company is a part. The index made gains of 30% YoY.

The growth in the stock price and the index is supported by the macro-economic estimates made by McKinsey & Company. As per their research, the country's speciality chemicals market is expected to grow to USD 40 billion by 2025 from USD 28 billion in 2018.

Laxmi Organic Industries Ltd is a domestic company engaged in the business of speciality chemicals. The company operates in 3 business segments- 1) Acetyl Intermediaries, 2) Specialty Intermediaries, and 3) Emerging Chemistries. With its broad range of speciality ingredients and solvents, the company caters to diverse end-market sectors like pharmaceuticals, agrochemicals, food packaging, pigments and coatings.

In the recent quarter Q3FY22, on a consolidated basis, the company’s net revenue increased by 97.44% YoY to Rs 859.88 crore. The PBIDT (ex OI) went up by 75.39% YoY to Rs 118.66 crore. However, owing to a steep 2x rise in the cost of raw materials, the corresponding margin contracted by 173 bps to 13.80%. Similarly, the company’s net profit went up by 81.59% YoY to Rs 82.10 crore.

At 12.02 pm, the shares of Laxmi Organic Industries Ltd was trading at Rs 408.70, an increase of 2.30% from the previous day’s closing price of Rs 399.50 on BSE. The stock has a 52-week high & low of Rs 628.05 and Rs 171.50 on BSE.

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