Rs 156 to Rs 2,200 in five years: Multibagger stock with low debt in correction mode, what's next?

Shares of Shaily Engineering Plastics have delivered multibagger returns for investors in the last five years. The stock of precision plastic engineering firm, which closed at Rs 156 on January 15, 2021 rose to a high of Rs 2,200 in the current session, clocking 1,310% returns during the period. However, the stock has tanked 8.60% in a month of which 3.57% correction has come in a week. In comparison, Sensex has risen 70.41% in five years.

In the current session, Shaily Engineering shares gained 3.23% to Rs 2200 against the previous close of Rs 2131.20 on BSE. Market cap of the firm stood at Rs 9880.57 crore. Later, the stock closed 1.26% higher at Rs 2158.10. The multibagger stock has risen 575% in two years and gained 605% in three years. Market cap of the firm rose to Rs 9880 crore. Total 5591 shares changed hands amounting to a turnover of Rs 1.21 crore on BSE. The stock hit a 52 week high of Rs 2799 on November 17 last year. The stock has gained 64.79% from 52 week low of Rs 1304.65 reached on February 19, 2025.

In terms of technicals, the relative strength index (RSI) of Shaily Engineering stands at 29.5, signaling the stock is trading in the oversold territory. Shaily Engineering shares are trading lower than the 10 day, 20 day, 30 day, 50 day, 100 day but higher than the 150 day, 200 day moving averages.

The company had low debt at the end of March 2025 quarter. Its debt to equity ratio stood at 0.38. A ratio under 1 is generally considered comfortable for a company.

Global brokerage UBS has a price target of Rs 4,000 on the stock.

UBS expects strong earnings growth for Shaily. "We forecast a 75% EPS CAGR in FY25-28. Buy with price target of Rs 4,000." The brokerage has highlighted Shaily's patented technology for fixed-dose and auto-injector pens as a key factor for the upcoming launch of generic GLP-1 therapies.

With the GLP-1 (semaglutide) patent set to expire in 2026 in India, Canada, and Brazil, UBS sees a considerable opportunity. "The GLP-1 (semaglutide) patent is to expire in 2026 in key markets, including India, Canada and Brazil, " said UBS. "We believe these geographies have a total addressable market of 550-600m devices, or Rs80-85bn revenue, by 2030."

"Shaily has tied up with 23-24 global pharma companies for generic GLP-1, implying a 50-60% share in these three markets," the global brokerage said, adding that entry barriers are high due to patented technology and regulatory requirements, making it difficult for pharma companies to change injector vendors.

Jigar S Patel, Senior Manager - Equity Research from Anand Rathi said, "Support for the stock will be at Rs 2100 and resistance at Rs 2200. A decisive move above the Rs 2200 level may trigger a further upside to Rs 2400. The expected trading range will be between Rs 2,000 and Rs 2,400 in the short-term."

Shaily Engineering Plastics is engaged in the manufacture and sale of customised components made up of plastic and other materials.