Diffusion Engineers share price hits upper circuit after strong debut on Dalal Street. Buy, sell or hold?

Stock market today: After listing at a decent premium despite weakness on Dalal Street during the early morning session, Diffusion Engineers share price attracted buying interest among the Indian stock market bulls. This led to further appreciation in the newly-listed stock, leading to the locking in of a 5% upper circuit. Diffusion Engineer's share price opened on the BSE at ₹188, whereas on the NSE at ₹193.50. The stock hit a 5% upper circuit on BSE after climbing to an intraday high of ₹194.35.

According to stock market experts, the Indian consumable item market is expected to register robust growth in the next few years, and the company is ready to match the anticipated demand in the business. As the company is among the top three industry players, it is expected to reap the benefit of market expansion at its maximum. So, depending on their perspective, those with a long-term view can hold the scrip for medium to long term. For short-term investors, experts have advised profit-booking or holding with a stop loss below Re 1 from today's intraday high on a closing basis. If the stock moves upside again and hits the upper circuit on Monday, one should follow the same trick till the stop loss triggers.

Diffusion Engineers share price outlook

Advising short-term investors to book profit and exit, Arun Kejriwal, Founder of Kejriwal Research and Investment Services, said, "Those who have applied for the stock for listing gain are advised to book profit and exit as the stock is fairly priced. However, if someone wants to maximize one's short-term returns, they can hold the scrip while maintaining stop loss below Re one against today's high. They can follow the same trick during the following session until the stop loss triggers."

On the suggestion to the long-term investors, Akriti Mehrotra, Research Analyst at StoxBox, said, "As India continues to experience rapid industrialization and increasing demand for improved infrastructure, the welding consumables market is estimated at around Rs. 51 billion in FY24, with projections of Rs. 64-66 billion by FY27. The company strategically plans to expand its manufacturing activities to meet this growing demand. Diffusion Engineers ranks among the top three industry players in terms of CAGR for operating income, profitability, and EBITDA between FY21 and FY24."

"The company demonstrated substantial revenue growth from FY22 to FY24, with a CAGR of 16.6%. The company's profit after tax (PAT) also rose significantly, from ₹170.5 million in FY22 to ₹308.0 million in FY24. We thus recommend that investors allotted shares consider holding their positions from a medium to long-term perspective," the StoxBox expert said.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.