Outperforming stock to watch out for: Morepen Laboratories carves out its medical devices business into a subsidiary!

The stock is seen outperforming the broader market indices as it is up by more than 2.5 per cent.

Morepen is a leading manufacturer of high-quality APIs, home diagnostics, formulations, and OTC products in north India.

All the manufacturing facilities of the company are in the state of Himachal Pradesh and meet the latest international standards. The company’s API facilities at Masulkhana & Baddi are approved by USFDA as well as other regulatory bodies of Europe, Asia, and Australia. The company’s state-of-the-art manufacturing facility at Baddi comprises a scientifically integrated complex of 10 plants, each with a specific product profile. Amongst several APIs manufactured by Morepen, the company is the largest manufacturer of Loratadine and Montelukast (anti-allergy & antiasthmatic drugs). 

The stock is seen outperforming the broader market indices as it is up by more than 2.5 per cent. On a WTD basis, the stock is up by a meagre 1.23 per cent, while on an MTD basis, it is up by a whopping 9.80 per cent. If this doesn’t excite you, the YTD basis return would leave you awestruck as the stock has jumped nearly 88 per cent.  

The company has announced in a recent press release that it is carving out its point of care (POC) medical devices business into a newly incorporated wholly-owned subsidiary namely, Morepen Devices Limited. The shareholders have given their approval for the same on September 28, 2021, in the 36th Annual General Meeting (AGM) of the company. The transfer of the business would happen as per the terms of the business transfer agreement to be signed between both companies.  

The medical devices (POC) business of the company has been delivering exponential growth for the past several years and also, achieved a leadership position in the market. A stupendous growth of 71 per cent was recorded in the previous financial year ending March 2021. The growth trends are being continued in Q1FY’22 wherein, POC business recorded a spectacular growth of 187 per cent.  

Anubhav Suri, CEO, Medical Devices Business said, “While the growth is stupendous, we believe this is only the tip of the iceberg. The Indian POC market is expected to touch US$ 16 billion by 2025 and we want to be the no. 1 POC player in India with a very large part of our manufacturing being ‘Made in India’.”

He concluded by saying, “The number of POC medical devices & home testing are growing at an exponential pace as technology and cost reduction has made it possible for doing tests at home that could only have been done in a lab before. We believe the number of POC devices & tests will increase significantly over the next 3-4 years due to advances in biosensors and other rapid diagnostic technologies.”