CMP: 58

Sunshield Chemicals Ltd. manufactures ethylene oxide condensates, alkyl phenols, sulphonates, esters, amides and other chemicals.

This is purely a news based call. Rhodia Amines Chemicals Pvt Ltd and Solvay have made an open offer to acquire majority stake in Sunshield Chemicals at Rs 51 per share. Sunshield Chemicals is a 43 Crore penny cap stock trading at a P/E of 32. It runs at a debt of 37 Crores with nearly 1 Crore cash in hand. Debt levels are too heavy which makes it fundamentally weak. Revenues have risen from 42 Crores to 94 Crores in the last 5 years. It has turned around from losses to 1 Crore in profits in the last 5 years. Traders can buy based on the news and gain on the short term upside because of the news with stop loss at 51.