HLE Glascoat zooms 16%; here's what fueling the sharp rally at the counter

On Tuesday September 26, DSP Mutual Fund's DSP Micro Cap Fund purchased 2.4 million equity shares representing 3.5 per cent of total equity of HLE Glascoat for Rs 121.25 crore.

Shares of HLE Glascoat surged 16 per cent to Rs 587.55 on the National Stock Exchange (NSE) on the back of heavy volumes after DSP Mutual Fund on Tuesday acquired over 3 per cent stake in the company via block deals.

On Tuesday, September 26, DSP Mutual Fund A/c DSP Micro Cap Fund purchased 2.4 million equity shares representing 3.5 per cent of total equity of HLE Glascoat for Rs 121.25 crore. The mutual fund bought shares at an average price of Rs 505 via block deals on the NSE, the exchange data shows.

The company’s promoters Himanshu Khushalbhai Patel (1 million shares), Nilesh Khushalbhai Patel (1 million shares) and Harsh Himanshubhai Patel (0.46 million) collectively sold 2.47 million shares of HLE Glascoat, the exchange data shows.

At 10:42 AM; the stock was trading 11 per cent higher at Rs 566.05, as compared to 0.44 per cent decline in the Nifty 50. A combined 2.2 million shares had changed hands on the NSE and BSE so far. The stock had hit a 52-week high of Rs 764.85 on October 18, 2022 and a 52-week low of Rs 465 on March 29, 2023.

HLE Glascoat is engaged in two main engineering businesses, namely manufacturing of specialized Filtration and Drying equipment and other chemical engineering equipment and manufacturing of Glass-lined reactors and equipment.

The company’s products in the Engineering business (Filtration and Drying equipment and Glass-lined equipment) are predominantly used by the manufacturers of Active Pharma Ingredients (API) and Chemicals (agrochemical, specialty/ fine chemicals and dyes and pigment industries). The company caters to both the Indian and international markets, providing them with superior quality engineering products.

While the remainder of 2023 is expected to be marked by financial uncertainties in the global markets, the management remains confident in HLE Glascoat’s ability to sustain its growth trajectory.

The company’s optimism stems from a robust order book encompassing both Indian and European operations. The ongoing stream of enquiries and productive customer interactions further bolster medium-term outlook. The Indian economy’s resilience bodes well for potential demand from end-user industries within this region. Stability in the prices of key raw material also provides optimism for enhancing business performance, HLE Glascoat said in its FY23 annual report dated September 6, 2023.

The company further said it will also continue to focus on adding newer customers from the MSME sector, which has tremendous potential. Further, over 6,000 existing installations, running for 15 to 25 years, will need replacement of parts or complete equipment in the medium term.