Sudarshan Chemical shares jump 11% after Roha plant opens, India Ratings upgrades outlook
Shares of Sudarshan Chemical Industries rallied 11 percent intraday on April 8 after India Ratings revised its outlook on the company to “positive” from “stable”.
Another reason for the rally could be the recommencement of production at Roha plant, Maharashtra.
The stock rallied 5.67 percent in the previous session, taking the two-day gains to over 17 percent. It was trading at Rs 386.25, up Rs 16.75 or 4.53 percent on the BSE at 13:12 hours.
“India Ratings and Research has revised the company’s outlook to”positive” from “stable” while affirming its long-term issuer rating at A+,” the company said in its BSE filing.
The rating agency revised the outlook to positive on company’s unsecured loans, non-fund-based working capital limits, fund-based working-capital limits, term loans and term deposits while affirming earlier ratings.
“The outlook revision reflects India Ratings’ expectation of sustenance of the company’s strong credit profile over the medium term, driven by the strategy growth in its profitability amid a supportive demand environment,” company said.
“The revenues growth is likely to be underpinned by the increased capacity of existing products and the launch of new products. The margins are expected to remain resilient due to an improved product mix, backward integration, cost optimization, and higher operating leverage,” it added.
Further, the company said as it had received the necessary permission to restart Roha site and transport material.
“Production capacities and deliveries will ramp up gradually based on availability of raw material, manpower and transport infrastructure within the conditions stipulated by the letter granting permission,” it added.
The company’s manufacturing facilities at Roha and Mahad and offices had temporarily suspended due to pandemic of novel coronavirus (COVID-19) since March 26.
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