Gladiator Stocks - Vardhman Special Steel - ICICI Direct

Technical View

The metal sector regained upward momentum after couple of months breather. Within metal space Vardhman special steel has relatively outperformed its peers. Currently stock has formed a higher base above 10 weeks EMA which has been held since June 2020, highlighting elevated buying demand in the vicinity of 10 weeks EMA. Hence, offering fresh entry opportunity with favourable risk reward set up

Over past nine weeks stock has retraced 61.8% of preceding eight weeks rally (Rs. 190-222), highlighting robust price structure that augurs well for next leg of up move

The volume has been robust during up trend followed by lower volumes during past two months correction, indicating healthy consolidation. Meanwhile, stochastic oscillator approaching oversold territory, indicating impending up move

Fundamental View

Vardhman Special Steel (VSSL), a Vardhman group company, is a mid-sized steel company engaged in production of special steel and alloy steel catering to a wide range of sectors like automotive, engineering, tractor, bearing and allied industries. In terms of capacity, VSSL has a steel melting shop capacity of 200000 tonnes, rolling mill capacity of 180000 tonnes and bright bar capacity of 36000 tonnes

Recently, VSSL was granted the environmental clearance (EC) for expansion of capacity at its existing plant in Ludhiana, to up to 280000 tonnes per annum of rolled production. With this approval, the path for enhancement of capacity has been cleared. To begin with, the current rolling capacity of 200000 tonnes per annum which would be increased to 250000 tonnes per annum. Total capex for the plan is expected to be ~Rs. 250 crore

In Q1FY22, export contributed about 5% of total sales volume of 43705 tonnes. Going ahead, the management expects exports contribution likely to increase to ~25- 30% of total volume by FY24-25E

For details, click on the link below: Link to the report

Shares of Vardhman Special Steels Limited was last trading in BSE at Rs. 263.20 as compared to the previous close of Rs. 242.20. The total number of shares traded during the day was 97297 in over 3560 trades.

The stock hit an intraday high of Rs. 269.95 and intraday low of 240.55. The net turnover during the day was Rs. 25360942.00.

Source : Equity Bulls

Keywords

VardhmanSpecialSteels INE050M01012 VSSL ICICIDirect GladiatorStocks