This Radhakishan Damani owned stock is making a comeback; Here's what's driving the upmove in Mangalam Organics

Mangalam Organics has surged more than twofold from its all-time lows of around Rs 200, a level that it slipped to in March this year.

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Ace investor Radhakishan Damani has held on to his 2.2 percent stake in commodity chemicals make Mangalam Organics since the June quarter of FY21. The ace investor keeping his holding in a company intact is often seen as a sign of his continued bullishness over the scrip. A similar story seems to be panning around for Mangalam Organics.

The stock was locked in a 5 percent upper circuit at Rs 571.30, which also happens to be its highest level seen in a year. Not just that, shares of Mangalam Organics are also on the path of a turnaround as the stock has surged more than twofold from its all-time lows of around Rs 200, a level it slipped to in March this year.

Even though the stock hit a record low in March this year, its downturn had begun since it started correcting from levels around Rs 1,200, touched in January of 2022. All through the while, Damani held on to his stake in the company, with his patience finally yielding results.

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The surge in the stock on September 3 came just a day after the company's promoter, Kamalkumar Ramgopal Dujodwala lapped up 3.2 lakh shares, representing nearly 4 percent stake in Mangalam Organics valued at 17.82 crore.

This stake increase by the promoter has ushered confidence among investors over an imminent rebound for the company in the coming quarters. The company has managed to consistently deliver improved net profit quarter-on-quarter in the past fiscal as it sailed through industry headwinds.

However, with green shoots of recovery making its way for the chemicals sector, Mangalam Organics' earnings performance is also set to improve in the upcoming quarters, as the worst is now behind. These expectations have further supported sentiment for the stock, leading to its meteoric rebound in the past five months.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.