Small-cap stock jumps over 6 per cent: here’s the catalyst and plan for strengthening the market position!

Technically, the stock has reclaimed its 20-DMA, an important short-term moving average and has also seen a range shift on the RSI. MACD has generated a positive crossover.

In a recent nail-biting IPL match between Chennai Super Kings and Rajasthan Royals, one of the game's greatest finishers fell short of crossing the finish line. However, in the stock market world, a Small-Cap company has soared over 6 per cent at the start of the day. The company in question is BigBloc Construction Limited, one of India's largest manufacturers of Aerated Autoclaved Concrete (AAC) Blocks, Bricks and Panels. So, what's the reason for this strong up-move in a tepid market?  

Bigbloc Building Elements Private Limited, a wholly-owned subsidiary of BigBloc Construction Limited, has commenced commercial production at its 5-lakh cubic meter per annum AAC Blocks plant at Wada in Palghar, Maharashtra. With this, the company can meet the growing demand for AAC blocks in Western India and strengthen its position in markets like Maharashtra, Gujarat, Madhya Pradesh and Rajasthan. The Wada plant is expected to generate revenues of Rs. 200 crore per year and will employ around 350-400 people at full capacity.  

The total capex for the Wada project is estimated to be around Rs. 70 crore for setting up the 5-lakh cubic meter per annum plant. The company has invested Rs. 48 crore in the project so far for the commercial operations of Phase I. Additionally, the company is eligible for a 60 per cent subsidy from the state government for the project and expects to generate 1 lakh units of carbon credits per annum from the Wada project, representing 1 tonne of CO2e an organization is permitted to emit.  

Technically, the stock has reclaimed its 20-DMA, an important short-term moving average and has also seen a range shift on the RSI. MACD has generated a positive crossover. The strong fundamentals, along with the technical indicators, suggest that BigBloc Construction Limited is a stock to watch out for in the coming days.