Shares of Safari Industries (India) Ltd. surged over 12% on Tuesday after a report by Nuvama Institutional Equities said that the company's next leg of growth will be driven by capacity expansion, along with the launch of its premium brand.
Tuesday's gains came in despite the stock trading ex-bonus. The stock had closed 3% lower on Monday.
Safari has planned a qualified institutional placement of Rs 500 crore, and aims to embark on its next leg of growth via capacity expansion, Nuvama said in the report. It has also forayed into the premium segment via Urban Jungle.
"Future growth driver remains capturing a greater share in the core segment," said the brokerage.
Shares of Safari Industries rose as much as 12.7%, the most since Dec. 4, before paring gains to trade 8.7% higher at 11:54 a.m. This compares to a 0.04% advance in the NSE Nifty 50.
The stock has risen 153.61% year-to-date. Total traded volume so far in the day stood at 13 times its 30-day average. The relative strength index was at 50.21.
Of the nine analysts tracking the company, seven maintain a 'buy' rating, and two recommend a 'hold', according to Bloomberg data. The average 12-month analysts' consensus price target implies an upside of 12.7%.
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