J B Chemicals gains after regulatory price hike

J B Chemicals & Pharmaceuticals rose 1.51% to Rs 426 after regulatory one-time increase in price of Metronidazole formulations.

J B Chemicals & Pharmaceuticals announced before market hours today, 16 December 2019, that National Pharmaceuticals Pricing Authority, vide order dated 13 December 2019, notified one-time price increase of 50% from the present ceiling price of several formulations including four formulations of Metronidazole manufactured by the company.

The company will implement the price increase from the next manufacturing batch. The impact of this notification for an entire financial year could be to the tune of 5% of the domestic formulations sales.

Shares of J B Chemicals & Pharmaceuticals gained 2.76% in two trading sessions to its current market price of Rs 426 from its recent closing low of Rs 414.55 on Thursday, 12 December 2019.

The Nifty 50 index was down 3.45 points or 0.03% at 12,083.25.

On the technical front, the stock's RSI (relative strength index) stood at 69.376. The RSI oscillates between zero and 100. Traditionally the RSI is considered overbought when above 70 and oversold when below 30.

The stock was trading well above its 50-day moving average (DMA), 100-day moving average (DMA) and 200-day moving average (DMA) placed at Rs 379.22, Rs 377.25 and Rs 365 respectively. All these levels would serve as support for the upcoming trading sessions.

J B Chemicals & Pharmaceuticals' consolidated net profit soared 82.4% to Rs 93.62 crore on 4.8% rise in net sales to Rs 456.42 crore in Q2 September 2019 over Q2 September 2018.

J. B. Chemicals & Pharmaceuticals manufactures and markets a range of pharmaceutical formulations, herbal remedies and active pharmaceutical ingredient (APIs). The firm's business segments include domestic formulation business, exports and API business.

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