Shares of Vesuvius India slumped over 9% in Tuesday's early trade as the company posted weak earnings for the third quarter on a sequential basis though the results were strong on a year-on-year basis.
Additionally, analysts expect the stock to be under pressure.
"A further weakness or profit booking is possible toward 1,550 level, recent swing high of 1,800 level is resistance," said an analyst.
At 10:30 am, the stock was trading 9.80% lower at ₹1,624 per share.
Technically, the stock has outperformed the broader markets recently, and recorded a new 52-week high in the past seven trading sessions.
The company's profit after tax for the quarter ended December jumped 110.4% on year to ₹27.6 crore but sequentially fell 23.4%. The company for the October-December quarter reported revenues at ₹348.4 crore, which grew by 34.5% on year, aided by better demand in steel and cement. The revenue marginally fell by 1.3% sequentially.
Earnings before interest, taxes, depreciation, and amortisation (EBITDA) margins expanded by 356 basis points on year to 11.3% and contracted 282 basis points quarter-on-quarter (QoQ).
"Overall, the company's revenue saw a strong growth led by better demands in sectors like steel, cement which consumes more than 80% of refractories products. Going forward, Vesuvius is well placed to capture domestic market share through focus on localised manufacturing and new product launches driving faster growth. Additionally, Higher steel production and technological advancement is expected to further drive refractories demand," said ICICI direct Research in its report.
The stock's weekly average delivery volume is 49.11%.
