NELCAST

BSE Code ........ 532864 | Tar­get 1 .... ₹97 | Tar­get 2 .... ₹101 I CMP : ₹86

Flash News Investment - - DIWALI RECOMENDATION -

The largest pro­ducer of duc­tile iron cast­ings and grey iron cast­ings caters to com­mer­cial ve­hi­cle and trac­tor seg­ments. The com­pany has re­cently in­vested Rs 79 crore for the first phase of a green­field project for man­u­fac­ture of iron cast­ings in Andhra Pradesh. The plant over­all holds ca­pac­ity of 54000MT, of which 18000MT is ex­pected to get utilised in the first phase. The com­pany has wit­nessed sales re­cov­ery since FY2013 and, since then, it has been grad­u­ally yet con­sis­tently post­ing rev­enue and PAT growth, re­cently at 2.5% and 6.6%, re­spec­tively.

The stock, af­ter reg­is­ter­ing low of Rs 13.85 in the month of Au­gust 2013, has been in an up­trend and reg­is­tered a high of Rs 76.60 in the month of Jan­uary 2016. Since then, the stock price os­cil­lated in a price band of about Rs 42-81.80. Re­cently, the stock has wit­nessed break­out from the 22- month base for­ma­tion, which sig­nals re­sump­tion of up­ward mo­men­tum. The up move in the cur­rent month has been on the back of strong par­tic­i­pa­tion, as the trad­ing vol­umes half­way in the cur­rent month have touched the mark of 41 lakh shares, which is higher than the av­er­age vol­ume of the stock. Ad­di­tion­ally, the monthly price ac­tion half­way in the cur­rent month had formed the big­gest bull can­dle since De­cem­ber, 2015, which sug­gests dom­i­nance of the bulls.

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