Agrochemical company PI Industries broke the deal with Ind Swift Laboratories, a company that makes active pharmaceutical ingredients (APIs). After this, the shares of PI Industries fell sharply on Tuesday. However, on the other hand, the shares of Ind Swift hit the upper circuit with a jump of 10%.
Shares of Ind Swift Laboratories were locked at Rs 67.40. On the other hand, shares of PI Industries were trading at Rs 2,756, down about 8% on the BSE. PI Industries is one of the multibagger stocks in the chemical industry, which has given returns of 2,800 per cent to its investors in the last 10 years.
Sun Pharma Q2 Result: Profit up by 12.9%, income also seen increase
In July this year, PI Industries Limited had entered into a Business Transfer Agreement (BTA) to acquire the API and Intermediate business of Ind Swift Laboratories Limited (ISLL). PI Industries said in a statement issued on 1 November that under the deal, Ind Swift was to fulfill a number of pre-agreed conditions by 31 October 2021. “Since Ind-Swift has not been able to fulfill these pre-agreed conditions, the Business Transfer Agreement (BTA) entered into between the two companies stands cancelled,” the company said. PI Industries further said, “In view of non-fulfillment of the pre-determined conditions and non-compliance with some of those conditions, the company has decided not to pursue this deal.”
A stock market analyst said, “The price of shares of PI industries had reached Rs 3535 on September 17 this year, which is its highest level. Today this stock is trading with a fall of 22% from this level of 2,500. But it has strong support and due to today’s news, we expect PI Industries shares to reach this level in the next trading sessions.”
Dhanteras 2021: Want to buy gold on Dhanteras, know the right and safe way from here, also avoid these risks
Another insider said, “Dalal Street expected PI Industries to increase profits by 6-7 per cent after this deal. That is why we saw a sharp decline when the deal was cancelled. However, the rest of the company’s fundamentals are still strong. and is one of the few quality stocks in the agrochemical industry.”
Technically, it is trading at its 200 day moving average of Rs 2750. “If it continues to be able to maintain that level then we can expect to bounce back. Otherwise, it may fall further towards ₹2,500 level and it will be a good buying opportunity.”
Bank Nifty is outperforming today, learn earning trades from Ashish Baheti
An expert from a brokerage firm said, “As far as this news for investors is concerned, this is a good time to deposit the stock. These bad news are not going to have any effect on the long-term business of the company. The news also gives an opportunity. In the last 10 years, PI Industries has given returns at 30% CAGR to its investors. The company’s business is almost debt free and its cash flow has also increased rapidly in the recent past.”
He said that the fall in the shares of PI Industries is a great buying opportunity for long term investors.
Facebook us for social media updates (https://www.facebook.com/moneycontrolhindi/) and Twitter (.) to follow.
.