Sharda Cropchem lists at 75% premium to issue price

MUMBAI: Sharda Cropchem, a crop protection chemical company, is holding onto intraday gains after a bumper listing.

At 12:45 p.m; the stock was at Rs 232.15, up 48.81 per cent, on the NSE. It surged 75.64 per cent, from its issue price of Rs 156, to touch all-time high of Rs 274 earlier in the day.

Sharda is engaged in marketing and distribution of wide range of formulations and generic active ingredients globally. It sources formulations/active ingredients from third party (primarily, China) for onward sale.

"About two years back we were 100% export oriented company, so 100% revenue was coming from exports. Two years back we acquired a small marketing company in India that is contributing to about 3 per cent of our revenue. Balance 97 per cent is coming from the exports," said RBV Bubna, MD, Sharda Cropchem in an interview to ET Now.

According to analysts at Ashika Research, the company has a strong balance sheet with healthy return ratios. It has maintained a focus on capital efficiency and has a conservative debt policy. It has the ability to leverage the balance sheet to take advantage of a favourable business cycle or market opportunity.

"It has strong return on capital employed (RoCE) of 25 per cent and return on equity (RoE) of close to 20 per cent. The net working capital days have also improved over the last four years and at the end of FY2014 the net working capital days stood at 99 days as compared with 143 days in FY2010," the report said.