Penny Stock Below Rs 2 Hit Upper Circuit: Company Enhances R&D and CDMO, Secures Rs 182.7 Crore Export Deal
The stock is up by 40.5 per cent from its 52-week low and has given multibagger returns of over 1,100 per cent in 5 years.
Today, shares of Remedium Lifecare Ltd hit a 2 per cent upper circuit to Rs 1.70 per share from its previous closing of Rs 1.67 per share. The stock's 52-week high is Rs 15.13 per share and its 52-week low is Rs 1.21 per share. The shares of the company saw a spurt in volume by more than 1.70 times on the BSE.
Remedium Lifecare Ltd. is strategically focusing on strengthening its Contract Development and Manufacturing Organization (CDMO) services along with its research and development (R&D) capabilities. This initiative forms a crucial part of the company's overarching strategy to enhance its global presence, with a particular emphasis on expanding its reach within the UK and European markets. Demonstrating investor confidence in this direction, the company's recent rights issue has garnered a near 50% subscription on its eighth day, translating to Rs 24.28 crore with total bids reaching Rs 24,27,93,851 for shares priced at Re 1 each.
The establishment of this CDMO unit marks a significant transition for Remedium, evolving its business model from a trader to a more integrated provider of pharmaceutical solutions. While the upgrade doesn't involve the addition of new manufacturing capacity, it will create a dedicated quality control and testing infrastructure. This infrastructure will serve as a central hub for rigorously testing both incoming raw materials and finished products, ensuring adherence to quality standards. Key improvements include the installation of advanced testing equipment for thorough material validation, an expansion of laboratory space to bolster R&D activities and product development pipelines, and dedicated facilities to effectively manage CDMO projects for international clients.
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Notably, the selected CDMO site operates independently of stringent compliance requirements typically associated with regulatory bodies like the USFDA or EU. Consequently, the implemented upgrades are specifically tailored to meet the unique quality standards of individual customers, thereby offering greater flexibility in the execution of projects. These enhanced capabilities are anticipated to significantly improve Remedium's operational efficiency and unlock new avenues for growth within global markets, particularly in the UK and Europe, where the company recently secured a substantial Rs 182.7 crore multi-year export contract with a prominent pharmaceutical distributor. Furthermore, Remedium's Singapore-based subsidiary, Remlife Global PTE Ltd., has partnered with JiyaYu Lifesciences to adopt green chemistry technologies for replacing animal-origin raw materials in API manufacturing, leveraging sustainable and cost-effective bioprocesses. The ongoing rights issue is providing the necessary financial support for this phase of development, signifying a pivotal step for Remedium towards becoming a diversified pharmaceutical solutions partner in the global healthcare landscape
About the Company
Founded in 1988, Remedium Lifecare Ltd. is a BSE-listed pharmaceutical company engaged in the trading and distribution of raw materials as a supply chain management for the pharmaceutical industry with an emphasis on quality, compliance and global reach. The company continues to expand its presence while playing a pivotal role in India’s pharmaceutical ecosystem.
Remedium Lifecare Ltd has a market cap of Rs 162.91 crore. According to Quarterly Results, the company reported net sales of Rs 38.15 crore and a net profit of Rs 0.76 crore in Q3FY25 while in its half-yearly results, the company reported net sales of Rs 140.93 crore and a net profit of Rs 4.18 crore in 9MFY25. In its annual results, the company reported total income increased by 698 per cent to Rs 4,062.80 crore and net profit increased by 504 per cent to Rs 32.72 crore in FY24 compared to FY23.
According to the shareholding pattern, the company's promoters own only a 1.11 per cent stake in the company and the maximum stake is owned by the public shareholders i.e. 98.89 per cent stake. The company's shares have an ROE of 123 per cent and an ROCE of 100 per cent. The stock is up by 40.5 per cent from its 52-week low and has given multibagger returns of over 1,100 per cent in 5 years.
Disclaimer: The article is for informational purposes only and not investment advice.