This smallcap stock has zoomed 43% in 2 days; Quant MF buys 0.52% stake

Shares of Heubach Colorants India (HCIL) has rallied 19 per cent to Rs 558 on the National Stock Exchange (NSE) in Friday’s intra-day trade, extending its previous day’s surge after Quant Mutual Fund (MF) bought less than 1 per cent stake in the company via open market.

In past two trading days, the stock of the dyes & pigments company has zoomed 43 per cent. In comparison, the Nifty 50 was up 0.18 per cent at 23,609 at 09:25 am. The stock had hit a 52-week high of Rs 654.90 on January 3, 2024.

On Thursday, June 20, Quant MF acquired 120,000 shares representing 0.52 per cent stake in HCIL for Rs 5.44 crore. The mutual fund purchased these shares at price of Rs 453.57 per share via block deal on the NSE, the exchange data shows. The names of the sellers are not ascertained immediately.

As on March 31, 2024, Quant Mutual Fund - Quant Manufacturing Fund held 1.45 per cent stake in HCIL, the shareholding pattern data shows.

The Company is engaged inter alia, in manufacturing and selling Specialty Chemicals. The Company has its own manufacturing sites in the State of Maharashtra, Tamil Nadu and Madhya Pradesh.

The management said financial year 2023-24 (FY24) was replete with industry-wide challenges such as price erosion, adverse demand fluctuations, global supply chain disruptions, and volatile raw material costs. Despite these headwinds, the company delivered solid results, with earnings before interest, taxes, depreciation and amortisation (Ebitda) grew 20.8 per cent over FY23. Margins improved to 10.2 per cent from 8.7 per cent.

The management expects FY25 to gain momentum as the year progresses, with a weaker first half building to a strong second half. The medium- to long-term outlook for HCIL remains positive, driven by its focus on innovation, operational excellence, and profitable growth.

HCIL boasts an extraordinary portfolio, encompassing organic and inorganic high-performance pigments, and pigment preparations for paints, varnishes, plastics, coatings, printing, non-impact printing, inks, latex, adhesives, and construction materials.

As global supply chains actively seek alternatives to China to reduce dependency and diversify sourcing, a strategic opportunity arises for India to attract investments and expand its chemicals sector. The Company can position itself as a reliable and competitive partner for international companies looking to establish manufacturing and supply capabilities in India, HCIL said.