Are investors changing their sentiments towards Valiant Organics?

On September 2, the stock has surged almost 10 per cent.

Valiant Organics is one of the Top Gainers on September 2. At 3:25 pm, on September 2, Valiant Organics Ltd.’s shares are up 9.54 per cent and are currently trading at Rs 662.25. The stock opened at Rs 612.25 and has since made an intraday high of Rs 678 and a low of Rs 612.25. 

Valiant Organics is an S&P BSE Small-Cap company with a market capitalisation of Rs 1819 crore. It is engaged in the business of chemical intermediates manufacturing. It is among the global leader in the production of chlorophenol and benzene derivatives and has six manufacturing plants spread across five different locations with a combined annual production capacity of 70,000 tonnes per annum. 

Valiant Organics' clientele includes companies operating in pharmaceuticals, dyes and pigments, speciality chemicals, and agrochemicals industries. According to FY22, agrochemicals accounted for 40 per cent of total revenue, dyes and pigments for 29 per cent, pharmaceuticals for 17 per cent, and speciality chemicals for the remaining 14 per cent. 

Over the last 10 years, the company has produced significant growth in its financials. The 10-year sales and net profit CAGR stood at 40 per cent and 39 per cent, respectively. Regarding FY22 performance, consolidated revenue was Rs 1153 crore, a 53 per cent increase from Rs 755 crore reported in FY21. However, net profit fell to Rs 128 crore in FY22 from Rs 131 crore in FY21. 

The performance of the stock shows a clear reflection of the company's declining margins. The stock has decreased by about 52 per cent over the past year. The PE multiple for the stock is at 18.22x.