This dye & chemical manufacturer's shares rally 33% in 3 sessions; here's why

Shares of Kiri Industries Ltd rose sharply in Monday's trade, extending their winning run for the third straight session. The dye & chemical manufacturer's stock jumped 10 per cent today to hit its upper price band of Rs 369.45. The counter has surged 33.06 per cent in three consecutive days.

The high valuation in Kiri's share price came amid the Singapore International Commercial Court's (SICC's) ruling on final valuation of its stake in DyStar Global Holdings (Singapore). The SICC has confirmed the final value of Kiri's 37.57 per cent stake in DyStar as $603.80 million as against $481.60 million, the company said in an exchange filing.

This matter concerns the longstanding litigation between Kiri and Senda. The Singapore court previously found that Senda was liable for oppressive conduct against Kiri and granted a buy-out order. Senda was ordered to purchase Kiri's 37.57 per cent shareholding in DyStar. In arriving at the value of Kiri's shareholding in DyStar for the purposes of the buy-out order, one of the issues raised was the compensation to be paid for Zhejiang Longsheng Group Co Ltd's (Longsheng's) unauthorised use of DyStar's patent to produce certain dyes.

Kiri's shares in DyStar were valued at $481.60 million by the SICC on June 21, 2021. Kiri and Senda both appealed to the court of appeal against various aspects of the SICC's decision.

On February 27, 2023, Kiri's valuation expert revised the valuation to $603.80 million for the buy-out order, which the SICC adjudged.

On the technical front, AR Ramachandran from Tips2trades said support on the counter could be seen at Rs 278.

The stock was last seen trading 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 67.40. A level below 30 is defined as oversold while a value above 70 is considered overbought. The company's stock has a negative price-to-equity (P/E) ratio of 15.68.

The scrip has a one-year beta of 0.85, indicating low volatility.

Kiri Industries is one of the largest manufacturers and exporters of a wide range of dyes, intermediates and chemicals from India.

Meanwhile, Indian equity benchmarks rose sharply in today's deals, led by gains in technology, metals, banks, financials and energy stocks.

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