Ester industries share is in Bullish Momentum – Read Why?

Ester share price Technical Analysis

Ester share price (Ester industries) looks strong in its technical chart with strong trading volume over the last 5 trading days. The trading volume of the script is above 100 DMA during this period. It seems the counter is ready to move up sharply with a golden cross over at 168 level where 50 DMA crossed 200 DMA from below. Ester share price formed a flag pattern at a range of 162 to 170 level and crossing above it.

Once the stock crossed above this flag it will start to move up again. Ester share price is trading above all its short and long-term moving averages on the daily chart. The stock is also trading above its super trend signals and is in a bullish up move. Buy at this level or on Dip.

Ester share price is also looking strong in the weekly chart with strong volume over the last two weeks. Ester share also formed a rounding bottom pattern in the weekly chart. On the daily chart, the Ester share price is forming higher highs for the last two trading days on 2 September, 22 and started crossing above its flag pattern. This share looks strong for both short- and long-term investments at this level. Once the counter closes above 188, it will move toward a new all-time high of 200 level.

Momentum Indicators

Momentum indicators ADX and MACD are looking bullish on the daily chart. One may buy at this level or buy-on-dip for a 10 to 20% gain in the short term. Ester share price is trading at 10.3 Price to Earnings (PE) and available at 2.75 price-to-book (PB) value while sector PE is 13.55 PE and 2.71 PB. The debt-to-equity ratio of the company is 1.03 in FY22. The counter seems cheap in comparison to its sector PE. The fundamentals of the company with a low debt-to-equity ratio make it attractive. It is a good stock to accumulate in correction.

Suggested Reading on Momentum stock section India Glycols, Gokex, Elgi Equipments, and PCBL. Company profile Deltatech Gaming, Company profile DCX systems

 Ester share price Fundamental Analysis

Fundamentally, Ester Industries is a strong company. Ester was founded in 1985. The company is a leading manufacturer of Polyester Films, Specialty Polymers, and Engineering Plastic compounds. The company’s polyester films cater to niche areas including rigid packaging, textiles, etc. The Engineering Plastics business processes various materials for industries like Automotive, Electrical & Electronics, Appliances, and Telecom.

The company has a global presence, supplying a large customer base in 75 countries across Europe, the Americas, Africa, the Indian subcontinent, the Far East, Asia Pacific, and the Middle East. Ester industries serve varied sectors spanning food and beverage packaging, Industrial packaging, Automotive, textile, construction, electrical and electronics, etc.

Ester Share price Financial Analysis

Despite the challenges faced during the last few quarters due to the Covid situation, Ester industries delivered strong operating revenue over the years. The company’s revenue has gone up by 42% from INR 991 crores in FY 2021 to INR 1405 crores in FY 2022. The quarterly performance of the company is also quite good with the march 2022 quarter revenue was INR 305 crores as against INR 262 crores in the march 2021 quarter.

Ester Industries is a small-cap company with a market cap of INR 1454 crores with a face value of INR 5. Return on capital employed is ~21.3 percent while return on equity is ~24 percent. Promoter’s shareholdings remain the same from June 2021 to June 2022 at 64.04%. FIIs have increased their holdings from 0.34 % in Mar 2022 to 0.39 % in June 2022. However, DII holdings in the company remain the same at 0.01% from March 2022 to June 2022. This reflects that FIIs are confident about the company’s performance.

Company Promoters and Management

Ester Industries is run by strong leadership. Mr. Arvind Singhania is the co-founder, Chairman, and CEO of the company. He has been actively associated with the company since its inception in the year 1985. Mr. Arvind has taken the company from a small start-up to a diversified and globally recognized organization. He has more than 35 years of rich and varied experience including production, supply chain, finance, and business development.

Ester Share price Daily chart
Ester Share price Daily chart
Ester Share price Weekly chart
Ester Share price Weekly chart