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Rain Industries Stock Analysis

Rain Industries Detail

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Rain Industries is in portfolio of Dolly Khanna. He is one of the top investors in India. The company belongs to Building Materials sector.

As per the Company website it is one of the world’s largest producers of calcined petroleum coke, coal tar pitch and other high-quality advanced materials. It operates in three key business verticals: carbon, advanced materials and cement.

The Company has manufacturing facilities in 8 countries across three continents (Asia, Europe and North America).

I have shared long term price performance chart of the Company below.As per Dow theory of technical analysis price performance over a period of time reflects Company state.

Rain Industries Stock Performance

You might have heard about Rain Industries in last two years. There are multiple reasons of it. First many ace investors were bullish on it and second it gave around 10 times return in very short span of time. Many investors overwhelmed by the returns invested in the stock at higher levels.

In above long term chart you can see that Stock has hardly traded above 50 mark in last 16 years. The only exception is period between year 2016 till date. From year 2002 to year 2016 it has traded around 20 to 40 mark showing flat results. There was no appreciation in stock prices all these years.

Currently stock is trading near 100 mark so any one who invested at higher level is at loss now. This stock is typical case of news based buying or hype based buying.Those who bought at lower levels and exited from stock benefited others have made loss.

Rain Industries My Opinion

Rain Industries is a Building Materials Company. Majority of the products from the Company are Business to Business products. They all aim different industries as well. There is not one industry which the Company targets.

It get around 10% of its revenue from Cement space. Cement is a growing sector in India due to Construction work and other Infrastructure projects still going strong. This is the only Business to Consumer product of the Company.

Other than that majority of revenue comes from Carbon segment (around 70% and more). The industries products from this segment caters is Aluminum and other specialty chemicals.

Majority of price performance in this stock was due to hype for Graphite electrodes and then the Lithium Ion battery and battery storage related products. But it is yet to see how much Company benefits from these two segments.

I strongly advice buying based on news only. These hyped news related movement cools off once market understands the facts or the big investors book off their profit before the hype dies.

In case you are interested then you can track the company by adding it to your stock watch list. That way you can keep close eye on the Company.