SKM Egg: 186% Profit Surge, Hits 5% Upper Circuit
30 Oct 2025
Analysis of Renol Polychem's capacity expansion through purchase of 3 molding machines and strong financial performance
📊 Strong Price Movement
Renol Polychem hits 20% upper circuit at ₹90.0 after company announces purchase of 3 molding machines for capacity expansion, reflecting market optimism about growth prospects.
SME Chemical Stock: Capacity Expansion Drive
Renol Polychem Ltd, a chemical and resin manufacturing company, has witnessed strong investor interest with the stock hitting 20% upper circuit at ₹90.0. The surge comes after the company announced the purchase of 3 molding machines for capacity expansion, signaling growth ambitions in the chemical sector. As an SME listed stock, Renol Polychem demonstrates strong financial metrics with ROCE of 46.1% and ROE of 45.4%, though investors should be cautious about the inherent risks in SME investments.
Chemical SME: Strong Growth Potential
Good Performance
About the Company
Renol Polychem Ltd operates in chemical and resin manufacturing and power marketing. The company operates facilities and markets products in numerous countries around the world, as well as running on six continents. Renol's chemical products are used in flexible packaging, vehicle manufacturing, synthetic performance fibers, and more. Renol provides pioneering solutions to help produce PP, PVC & CPVC pipes & pipe fittings. Their material is an all-in-one additive containing stabilisers, internal & external lubricants, impact modifier & other essential chemicals or additives other than resin. Backed by top-notch manufacturing as well as R&D facilities located in Rajkot, their product categories include a basketful of profitable options and propositions. Be it any size or any combination, Renol assures customised batch quantities to suit specific requirements.
💎 Strong Financial Ratios
The company demonstrates exceptional profitability with ROCE 46.1% and ROE 45.4%, indicating efficient capital utilization and strong return generation for shareholders.
Key Financial Metrics & Technical Parameters
Current Price
₹ 90.0
Market Cap
₹ 71.5 Cr
Stock P/E
14.3
Face Value
₹ 10.0
Financial Performance Highlights
ROCE
46.1%
Excellent
ROE
45.4%
Excellent
EPS
₹ 6.25
Strong
Debt to Equity
0.52
Slightly Higher
| Technical Parameter | Current Value | 52 Week High/Low | Analysis |
|---|---|---|---|
| Current Price | ₹ 90.0 | ₹ 105 / ₹ 69.0 | Trading closer to upper range |
| Market Capitalization | ₹ 71.5 Cr | - | Small cap SME stock |
| Stock P/E Ratio | 14.3 | - | Reasonable valuation |
| Dividend Yield | 0.00% | - | Growth focused company |
Shareholding Pattern Analysis
| Category | Holdings (%) | Change vs Previous | Analysis |
|---|---|---|---|
| Promoters | 69.10% | Stable | Strong promoter confidence |
| FIIs | 0.68% | Marginal | Limited institutional interest |
| DIIs | 3.63% | Stable | Some domestic institutional holding |
| Public | 26.59% | Stable | Reasonable public float for SME |
Capacity Expansion Details
Machines Purchased for Capacity Expansion:
- Servo Motor Pump
- 300 TON SERVO PLASTIC INJECTION MOULDING MACHINE (300 TON SERVO MOTOR FULLY AUTOMATIC MICRO PROCESS CONTROL SYSTEM)
- Servo Motor Pump PLC Erico – 8” inch Screen 04 Valve – Rex Roth Hydro Motor – Radial Piston Heater - Ceramic Lubrication – Automatic Oil Tank – 350 LTR Motor - 20KW
This expansion is expected to enhance production capacity and improve operational efficiency for the company's chemical and resin manufacturing operations.
💡 Investment Perspective
- Reasonable Valuation: P/E of 14.3 appears reasonable for growth company
- Strong Profitability: Exceptional ROCE and ROE ratios indicate efficient operations
- Growth Initiatives: Capacity expansion through new machinery purchase
- Diversified Applications: Products used across packaging, automotive, and construction
- Export Presence: International operations across six continents
- Customized Solutions: Ability to provide tailored solutions for specific client needs
IPO Details & Corporate History
| IPO Parameter | Details | Analysis |
|---|---|---|
| IPO Size | ₹ 24.2 Cr | Moderate sized SME IPO |
| Listing Date | August 07, 2025 | Recently listed company |
| Current Market Cap | ₹ 71.5 Cr | Significant appreciation post listing |
| Face Value | ₹ 10.0 | Standard face value |
Post-IPO Performance: Renol Polychem has shown strong performance since its listing in August 2025, with the current market capitalization of ₹71.5 Cr representing significant appreciation from the IPO raise of ₹24.2 Cr. The company's focus on capacity expansion and strong financial metrics have contributed to investor interest.
⚠️ SME Stock - High Risk Investment
Important Warning for Investors and Traders:
- Liquidity Risk: SME stocks typically have lower trading volumes and liquidity
- Volatility: Higher price volatility compared to mainboard stocks
- Limited Coverage: Less analyst coverage and public information available
- Execution Risk: Capacity expansion projects carry execution risks
- Market Sentiment: Highly sensitive to market sentiment and news flows
- Regulatory Framework: Different regulatory framework for SME listings
- Exit Difficulty: Potential challenges in exiting large positions quickly
Investors should conduct thorough due diligence and consider their risk appetite before investing in SME stocks.
💡 Growth Drivers & Positive Developments
- Capacity Expansion: Purchase of new machinery to enhance production capabilities
- Industry Demand: Growing demand for chemical products in packaging and automotive sectors
- Export Opportunities: International presence across six continents
- Customized Solutions: Ability to provide tailored products for specific client requirements
- R&D Focus: Investment in research and development facilities in Rajkot
- Infrastructure Growth: Benefitting from infrastructure development in pipe manufacturing
⚠️ Sector-Specific Challenges & Opportunities
Chemical Industry Dynamics: Growth in packaging and automotive sectors provides opportunities but raw material price volatility remains a challenge
Regulatory Environment: Chemical industry subject to environmental regulations and compliance requirements
Global Competition: International operations face competition from global chemical companies
Technology Adoption: Need to continuously invest in technology and process improvements
Working Capital: Chemical manufacturing typically requires significant working capital
Export Challenges: International operations exposed to currency fluctuations and trade policies
🏢 Official Corporate Announcement Reference
For detailed corporate announcement about machinery purchase, refer to the official exchange filing:
Renol Polychem Machinery Purchase - Official PDF