Shares of this smallcap pharma stock rose over 5% despite a weak market; do you own it?

Sigachi Industries has posted strong double-digit growth in the recent corporate earnings season.

The pharma stocks have been under pressure in recent times due to rising input costs and huge competition leading to narrow margins. However, smallcap companies show huge growth prospects in new domains of this sector. One such stock is Sigachi Industries (NSE Code: SIGACHI) which has soared over 5% amid strong buying interest.

Sigachi Industries works in the manufacturing of cellulose-based excipients which also includes microcrystalline cellulose, the polymer used for finished dosages in the pharmaceutical industry. With a market capitalisation of nearly Rs 1,000 crore, the company has shown promising growth in the recent past. In its Q2 FY22-23, the company posted a jump of 44% YoY in revenue to Rs 82.47 crore while net profit grew by 37% YoY to Rs 13.58 crore as against Rs 9.86 crore in the corresponding quarter of the previous year.

Technically, the stock has registered a breakout from its 12-week cup pattern with good volumes. In the previous 2 weeks, the stock has seen huge buying interest as it jumped nearly 15% during this period. It trades above all its key moving averages which are deemed positive. The 14-period daily RSI (69.28) lies in the bullish zone and indicates strong strength in the stock. The ADX (27.16) is pointing northward and shows good trend strength. The OBV has crossed above its prior swing high and shows fresh interest from investors. The Elder impulse system has also charted a bullish bar. Overall, the stock meets most of the bullish criteria and with positive price action, we can expect upward movement from the stock in upcoming trading sessions.

The stock trades at an attractive level post a decent correction from the past. Currently, the SIGACHI share price trades at Rs 303 level on NSE. Long-term investors as well as momentum traders should track this stock in upcoming trading sessions.