JBF Industries hits record high; stock soars over 60% in two weeks

JBF Industries has surged 17% to Rs 269, also its record high on National Stock Exchange (NSE), on back of heavy volumes.

The stock opened at Rs 231 and has seen a combined 2.18 million shares changing hands on the counter till 1036 hours on NSE and BSE.

Shares of the company engaged in the business of producing polyester based products, has rallied 61% from Rs 167 on November 21 after the company said its promoter acquired shares through open market transactions.

On November 21, Bhagirath Arya, one of the promoters of the company, had purchased 90,000 shares or 0.14% stake via open market. Earlier, on November 19, Bhagirath Arya bought 50,000 shares or 0.07% stake through market purchase, the company said in a filing.

Meanwhile, on November 28, 2014 JPMSL A/c Copthall Mauritius Investment Ltd bought 2.51 million shares of JBF Industries at Rs 217.23 on the NSE.

However, Chinar Arya Mittal, also the promoter of the company, had sold part or 2.5 million shares of the company at Rs 217.25 per share, data shows.

Analyst at Nirmal Bang has recommended ‘accumulate’ rating on the stock saying that the fall in Indian crude oil basket price will boost gross margin of the company.

With the fall in crude oil prices, its working capital requirement will reduce significantly, which will ease the high debt equity ratio and also reduce interest costs to that extent, analyst said in a report.

Raw material costs accounted for 72.9% of FY14 net sales. The costs of most of the raw materials like pure terephthalic acid or PTA (69.8% of raw material consumption) and mono ethylene glycol or MEG (25.6%l) are linked to crude oil prices. The costs of these raw materials accounted for around 72.0% of net sales and, therefore, the fall in Indian crude oil basket price will boost gross margin, it added.