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  • Category: Stock Market

    Why are shares of Ruchi Soya increasing daily?


    Unsure whether or not to invest in the shares of Ruchi Soya? Understand from investment experts why the stock of this company is rising daily and the pros and cons of investing in it.

    I am interested in investing in the market and have a question on Ruch Soya. When in the whole world all stocks are falling, how is it that shares of this company are rising every day? I would like to understand the pros and cons of investing in this company's shares.
  • Answers

    2 Answers found.
  • Share market investing is always associated with risks and it is not easy to predict the movement of the shares or a specific share in the future. Still people speculate and take risks by investing in the shares which appear to have a price increase in the near future or long run. The investors also take help of market analysts who have good experience in this area and they can sometimes advise the investor for a prudent investment in the market. Generally for an ordinary investor share buying is from a longer perspective to get the good returns in long term through dividends, bonus shares and price rise etc. For daily players the concept is different as they would jump in the market and buy some shares and sell them before they start to stagnate or come down from their apex prices.

    Ruchi Soya is a good company and there is a demand for its products but that is not the only thing that makes it a candidate to invest. Today it is going through a big bull phase and many people are buying it for the reasons best known to them only. Now in this blind race the share would try to achieve new heights but might stop at some level and either would remain there for a long time or come back to some intermediate value. Now in that process some smart people would make money by selling them in time and others might keep for a long time to sell them when the next phase of increasing prices comes in the life of this scrip.

    In the end of January this share was quoting around Rs 20 only and now it has reached above Rs 260 and it is a phenomenal rise seeing the 2-3 months period taken in this activity. Please note that once a share starts increasing then buying it becomes more and more riskier as there are chances of it to lose that gain anytime and in all probability might come down to some intermediate level. So buying at this high is risky and I would not recommend for it. In fact it is time to sell it if in case you have bought the quantities in February or march this year.

    We do not know whether the share price rise is due to the inherent strength of the company or just activities of the bulls in the market. So caution is always a better thing to adopt in the share market especially in such volatile scrips.

    Knowledge is power.

  • Investment in the share market is always associated with unpredictable risks and in case of Ruchi Soya Infustries, we cannot anticipate its financial health since its debt has almost touched to the level of 12, 000 crores according to the financial report published in 2018. However, the consolation part of its restoration of financial health is due to its take over by the Patanjali Aurveda in the year 2019.
    Now looking back of its history, Ruchi Soya was established in the year 1988 with the working capital of 750 crores and till 2008, it had established its leadership role in the manufacturing and selling of bakery and soya foods. The company has numerous plants producing brands such as Nutrela, Mahakosh, Ruchi Star, Ruchi Gold etc.
    Though the past performance of the company was quite encouraging but it could not maintain consistency in terms of profit in the year 2017 to 2019. Its price on 1 st January 2019 was quoted at Rs 9.40 but the same nosedived on 24 the July 2019 to a low level at Rs 3.27.
    Surprisingly, its share price has moved to Rs 270/- on 17 th April 2020 indicating an unexpected surge of its price. Such a phenomenal growth does not establish the real cause of the surge of the price. Here we can simply speculate that such a high move of the price may be due to recovery of its financial strength or may be some elements are operating to enhance its share price.
    You need to watch cautiously prior to making any heavy investment in this portfolio or still better, you may have the option to approach a financial consultant for the better guidance.


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