SUMICHEM - Swing Trade Analysis with AI Signals

Last Updated Time : 20 Dec 25, 07:02 am

Swing Trade Rating: 3.6

📊 Based on the given parameters, SUMICHEM shows mixed signals for swing trading. The stock is currently trading at ₹444, close to its support zone near ₹432. Technical indicators like RSI (34) and MACD (-8.35) suggest weakness, but strong fundamentals (ROCE 25.1%, ROE 18.8%, low debt-to-equity 0.02) provide resilience. The high P/E (41.1 vs industry 27.6) and PEG ratio (8.20) indicate overvaluation, limiting upside potential in the short term.

✅ Optimal Entry Price: Around ₹432–440, near support levels.

🚪 Exit Strategy: If already holding, consider exiting near ₹480–500 (DMA 50 resistance) or on weakness below ₹430.

Positive

• 💡 Strong ROCE (25.1%) and ROE (18.8%) indicate efficient capital use.
• 💡 Low debt-to-equity (0.02) ensures financial stability.
• 💡 Consistent profitability with PAT ~178 Cr.

Limitation

• ⚠️ High P/E (41.1) compared to industry average (27.6).
• ⚠️ Weak technicals — RSI oversold, MACD negative.
• ⚠️ Quarterly profit decline (-6.78%) shows slowing momentum.

Company Negative News

• 📉 Profitability dipped from 180 Cr. to 178 Cr. in the last quarter.
• 📉 Valuation stretched with PEG ratio at 8.20.

Company Positive News

• 📈 DII holdings increased by 0.32%, showing institutional confidence.
• 📈 Strong fundamentals with high ROCE and ROE.

Industry

• 🏭 Industry P/E at 27.6 suggests peers are valued lower.
• 🏭 Stable demand in agrochemicals sector supports long-term growth.

Conclusion

🔎 SUMICHEM is a moderately suitable candidate for swing trading. Entry near ₹432–440 offers limited downside risk, but upside is capped around ₹480–500 due to weak technicals and overvaluation. Best suited for short-term traders looking for a bounce from support rather than aggressive momentum plays.

Would you like me to also compare SUMICHEM’s swing trade potential with another agrochemical stock so you can see relative opportunities?