Coastal Corporation (CCL) hit an upper circuit limit of 20% at Rs 465.95, extending gains for the third trading session.
The stock has added 46.43% in three consecutive sessions.The stock came in the limelight after a domestic financial advisory firm on 12 January 2022 initiated its coverage on CCL with a target price of Rs 1,852 per share. The target price indicates an upside of 297.47% over the ruling market price.
The advisory firm believes that the stock is massively underpriced given the huge scope in the operating segment (shrimp) and the embarking segment (distillery).
It said that demand for shrimp and ethanol is rising rapidly, with USA and China showing good interest in shrimp and India in ethanol, respectively. CCL will have about 5x the useable capacity for shrimp processing and a 198,000 KLPD distillery for ethanol in the next two years, it added.
In the past one year, the CCL stock has risen 163.99% while the benchmark Sensex has added 22.86% during the same period.
On the technical front, the stock's RSI (relative strength index) stood at 95.35. 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 above its 50-day, 100-day and 200-day simple moving average (SMA) placed at 337.20, 324.26 and 302.61, respectively.
On a consolidated basis, net profit of CCL declined 12.29% to Rs 7.85 crore on 2.98% rise in net sales to Rs 128.10 crore in Q2 September 2021 over Q2 September 2020.
Visakhapatnam-based CCL is one of the leading manufacturer and exporter of a wide variety of shrimp. The company exports various grades of shrimp to countries such as the United States, Europe, Canada, the United Arab Emirates, Saudi Arabia, and Hong Kong.
CCL incorporated a subsidiary, Coastal Biotech, in Odisha during the Financial Year 2000-21 to carry on the business as manufacturers, producers, processors, buyers, sellers, refiners of ethanol. Coastal Biotech will set up an ethanol project with an installed capacity of 198,000 KLPD spread across 30 acres of land at an estimated capex of Rs 150 crore. The plant is likely to commence production by March 2023.
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