India Globalization Capital Inc (OTCMKTS:IGCC) has been on an excellent run, after underperforming in 2018. The stock has bottomed out from all-time lows thanks to a 150% plus spike. Supporting the upward momentum is a stellar financial report that underscores the company’s growth prospects. The company is also fresh from announcing robust revenue growth for the FY2018.
Share Price Analysis
In addition to a positive earnings report, India Globalization Capital sentiments have also inched a notch higher on the company winning an appeal against delisting proceedings on the NASDAQ. The exchange has unanimously ruled to set aside a decision made last year that opened the door for the delisting of the stock in the Exchange.Positive investor reaction to recent developments has seen the stock edged higher, after a long period of consolidation at all-time lows. After the recent spike, the stock is staring at the $4 a share level, which happens to be the immediate resistance level on the emerging uptrend. IGC Weekly ChartA breach of the critical resistance level should open the door for the stock to continue powering high in line with the upward momentum. Above the $4 a share level, the stock would have turned bullish, setting the stage for it to make a run for 52-week highs. Below the $4 a share level, the stock remains susceptible to further drops given the long term bear trend.
About India Globalization Capital
India Globalization Capital is a cannabis-focused company engaged in the development and commercialization of cannabis-based therapies. The company is currently working on therapies for treating Alzheimer, pain, nausea and eating disorders. The company also operates a legacy infrastructure division that trades in infrastructure commodities such as steel and iron.
Robust Revenue Growth
Robust revenue growth is the latest catalyst strengthening investor confidence in India Globalization Capital. The company says it generated revenues of $1.2 million for the third quarter ended December 31, 2018, compared to revenues of $762,000 for the same period in 2017. In addition, revenues for the nine months ended December 31, 2018, surged to $3.5 million compared to revenues of $1.1 million for the same period in 2017.While revenue growth affirms the company’s growth prospects in the cannabis sector, widening net loss is a point of concern. Net loss for Q3 2019 came in at -$1.14 million compared to a net loss of -$533,000 for the same period in 2017.In its defense, the company insists the wider than expected net loss was as a result of two one-time extraordinary items. For instance, the company incurred a $650,000 bill associated with an inventory written off in the quarter and a $300,000 bill on the settlement of a debt.
NYSE Listing
The announcement that the company has successfully challenged NYSE decision to delist the stock from the exchange also appears to have gone well with investors. The NYSE panel in its decision concluded that the company had not engaged in conduct contrary to the public interest that would call for delisting.
“We are happy with the result, and we believe the decision accurately shows our efforts to continue and expand our operations within our two existing business lines: our infrastructure business operating primarily in Asia; and our legal medical cannabis business/industrial hemp in the United States and elsewhere,” stated Ram Mukunda, CEO.
Listing on the NYSE is a significant milestone for India Globalization Capital, given the exposure the stock is poised to get. For instance, the company remains well positioned to attract institutional investor interest. In addition, the company remains well positioned to attract retail investors, eyeing opportunities in the cannabis sector, especially in the U.S.
Bottom Line
India Globalization Capital had come down tumbling after the NYSE moved to delist the stock from the exchange. The stock did tumble to all-time lows amidst growing concerns over its long term prospects. Fast forward the storm has calmed down on the stock regaining its status with the NYSE.In addition to NYSE listing, the company has shown its revenue base is growing at an impressive rate. A 50% plus increase in revenues in the recent quarter, attests to a company in a phase of robust growth. That said investor confidence should continue to inch higher. The stock looks set to continue powering higher given there is a lot of room to move on the upside.We will be updating our subscribers as soon as we know more. For the latest updates on IGCC, sign up below!Disclosure: We have no position in IGCC and have not been compensated for this article.
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