Aarti Drugs shares recover sharply from one-year low, jump 16%; here’s what tech chart hint

Shares of Aarti Drugs staged a sharp recovery on Monday after hitting their 52-week low level. The stock settled 20 per cent higher at Rs 380.30 over its previous close of Rs 316.95. Before the sharp rebound in share price, the scrip fell to its one-year low level of Rs 310.80 in intraday deals. Around 93,000 shares changed hands today on BSE, which was nearly five times compared to Aarti Drugs’ two-week average volume of 20,000 shares. Turnover on the counter stood at Rs 3.27 crore, commanding a market capitalisation (m-cap) of Rs 3,521.58 crore. There were 24,083 buy orders today against sell orders of nil shares.

At today’s closing of Rs 380.30, the counter traded 28.46 per cent lower from its 52-week high of Rs 531.60, touched on April 7 last year. It has declined 16.16 per cent on a year-to-date (YTD) basis.

On the technical front, the counter faces a strong resistance at Rs 381.70, an analyst said. “Aarti Drugs now faces strong resistance at Rs 381.70 on the daily charts. Investors who bought at lower levels should keep booking profits or keep a strict stop loss of support at Rs 353. Above Rs 383.70, the next resistance will be at 398,” said AR Ramachandran from Tips2trades.

The scrip has an average target price of Rs 490, Trendlyne data showed, suggesting a potential upside of 33.06 per cent. It has a one-year beta of 0.62, indicating low volatility on the counter.

The stock traded higher than the 5-day and 20-day moving averages but lower than the 50-day, 100- and 200-day moving averages. The counter’s 14-day relative strength index (RSI) came at 53.56. A level below 30 is defined as oversold while a value above 70 is considered overbought. The company’s stock has a price-to-equity (P/E) ratio of 19.23.

As of December 2022, promoters held a 59.66 per cent stake in the company.

Aarti Drugs is a part of the $900 million Aarti Group of industries. The company is engaged in the manufacturing of active pharmaceutical ingredients (APIs), pharma intermediates, specialty chemicals and also produces formulations with its wholly-owned subsidiary – Pinnacle Life Science Pvt Ltd. Products under APIs include Ciprofloxacin Hydrochloride, Metronidazole, Metformin HCL, Ketoconazole and Ofloxacin, whereas specialty chemicals include Benzene Sulphonyl Chloride and Methyl Nicotinate.

Over the years, Aarti Drugs said it has been able to carve a niche for itself and is looking forward to expanding its volumes. With the government initiative to encourage private health insurance schemes, consumer spending on medicines is expected to increase, which will spur growth in the generic sector in the domestic market, the company added.

Meanwhile, Indian equity benchmarks settled lower today amid a highly volatile trading session. The domestic indices were dragged by metals, technology, automobile, financials and banks. The 30-share BSE Sensex pack dived 361 points or 0.62 per cent to close at 57,629; while the broader NSE Nifty index moved 112 points or 0.65 per cent lower to settle at 16,988.

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