Is Emami ready for a 'fast move'?

The stock has delivered decent returns of about 30% on a YTD basis.

Emami Limited is a fast-moving consumer goods company engaged in providing Ayurvedic Medicinal Products, Cosmetics and Toiletries. It also operates in the personal and healthcare segment. It is a midcap company with a market cap of Rs 24,350 crore. The promotors of the company hold a little more than 50% of the stake, out of which about 1/3rd part is pledged. However, the pledge quantity is on a decrease for the last four quarters. The domestic institutions hold 24% and foreign investors hold 13% stake, while the public holds about 10% of the company’s stake.

The company has reported good revenue and net profits over the last few years, but the growth is below expectations. The business management assures strong practices to take the financial figures upwards and onwards.

The stock has surged almost 4% today and currently trades at 548. The stock has delivered decent returns to its investors of about 30% on a YTD basis. The stock is up by 3.5% in 1 month. Considering the performance of the sector overall and its peers, the stock has outperformed them by a good margin.

The stock has been underperforming in the last three months and is down by about 12% from its 52-week high. On the daily chart, the situation looks much improved as the stock is back above 20, 50 and 200-DMA with strong volume. The RSI has also shot up to 55 showing that the stock has regained strength. However, it still trades below its prior swing low. The trend indicator ADX is rising but lies below 25. Once it goes beyond 25, we can see the stock trend strong on the upside.

The stock has shown exceptional performance in Wednesday’s trading session, but one needs to wait for more clarity of the trend. The stock still trades below its 100-DMA, and once it closes above the key moving average with huge volume, we can find the stock to be ready for an uptrend. Traders are requested to include this scrip in their watchlist as we expect the stock to show some good movement in the upcoming days.