Garware Hitech Films is into manufacturing polyster films. This is essentially a commodity business, though the name of the company includes Hitech. The polyfilm cycle has started turning for the worse and in these kind of sectors usually markets smell a rat much before the bad results come through. Probably that is the reason most of these polyfilm companies like Polyplex, Cosmo, besides Garware hitech appear weak. When the cycle turns is anybody’s guess, so its better to stay cautious till the picture becomes clear.
Ashish Kacholia might have his own reasons for increasing his stake here. But as retail investors we need to look after our own interests rather than rely on following marquee investors.
I think you should do some more research into the prospects of the business going forward, both in near term and medium term and then take a call. Try to learn to differentiate between commodity and (consistent) growth companies.
In cyclicals, when the cycle is in an upswing, no price is too high and when it deteriorates, no price is too low. So don’t be guided by past numbers and try to extrapolate. I used to hold Polyplex earlier, when I knew the cycle was in an upswing and exited when price indicated exit. ( I also take guidance from some friends who are experts in these polyfilm cycles. )
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