Shaily Engineering bounces after 2-day fall

Shaily Engineering Plastics rose 3.80% to Rs 600 on bargain hunting after a recent steep fall.

Shares of Shaily Engineering Plastics lost 9.88% in the past two trading sessions to settle at Rs 578.05 yesterday, 9 December 2019, from its close of Rs 641.45 on 5 December 2019.

The stock slumped 9.03% to Rs 578.05 on Monday, 9 December 2019, after the company informed on Saturday, 7 December 2019, that there was a search at its Rania plant in Gujarat by Goods and Services Tax (GST) authorities and the same has ended. As part of the investigation, the authorities have seized some moulds belonging to the company as well its customers as part of the process which is being contested by the company. The company said it is extending all co-operation and the investigation and submissions by the company is continuing.

There has not been any case of evasion of any duty which has been established as of now and the company has not received any show cause notice from the authorities till date. The company and its officials are cooperating in all possible manner to aid and complete the investigations. The company is working along with its legal counsels on the subject matter. Further, the company denied any allegations of tax evasion.

Meanwhile, the S&P BSE Sensex was down 125 points or 0.31% to 40,362.35.

On the technical front, the stock's RSI (relative strength index) stood at 37.518. The RSI oscillates between zero and 100. Traditionally the RSI is considered overbought when above 70 and oversold when below 30.

The stock was currently trading below its 50-day moving average (DMA) placed at Rs 661.79, and below its 200 DMA placed at Rs 649.62.

The company's net profit fell 1.7% to Rs 5.64 crore on 1.4% rise in net sales to Rs 87.58 in Q2 September 2019 over Q2 September 2018.

Shaily Engineering Plastics is engaged in the manufacture of plastics products.

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