On Radar: 90,00,000 warrants issued to promoters; profit doubled in small-cap pharma stock hits 52-week high!
The stock has demonstrated substantial resilience and growth, escalating by 95.2 per cent over the past year
On Friday, the Nifty commenced trading with a flat trajectory but gathered momentum during the final hours, culminating in a notable surge of 64.5 points, ultimately closing at 21,782. Despite a commendable rebound from intraday lows, the broader markets experienced a downturn, notably led by the Nifty Small-Cap index, which recorded a decline of approximately 1.40 per cent. However, amidst this backdrop, one standout performer emerged from the small-cap segment within the pharmaceutical domain, as it soared by nearly 12 per cent, achieving a fresh 52-week pinnacle of Rs 152.35 on the BSE.
This remarkable performer is SMS Pharmaceuticals Ltd (SMS), a distinguished entity listed on both the BSE and NSE, spearheaded by Ramesh Babu Potluri, serving as its Chairman and Managing Director. SMS specializes in the production of active pharmaceutical ingredients (APIs) and their intermediates, alongside engaging in contract manufacturing for API/bulk drugs. Presently, SMS operates two regulated facilities, namely Unit II and Unit VII, strategically situated in Telangana and Andhra Pradesh. Its global footprint extends across North America and Europe, catering to pharmaceutical enterprises spanning over 70 countries worldwide.
Recent quarterly disclosures from the company unveil a commendable growth trajectory, with sales surging by 8.52 per cent Year over Year (YoY) to Rs 161 crore. Furthermore, the operating profit stood at Rs 29 crore, while the net profit exhibited an impressive YoY doubling, ascending to Rs 12 crore from Rs 5 crore in Q3FY23. A pivotal development emerged as the Board endorsed the proposition to raise funds through the issuance of Convertible Equity Warrants to the Promoters/Promoters Group. This issuance, encompassing up to 90,00,000 (Ninety Lakhs) Warrants, each convertible into equity shares valued at Rs. 1/- each of the Company at an issue price of Rs. 127/- (inclusive of a premium of Rs. 126/-) for each Warrant, aggregates to Rs. 114,30,00,000/- (Rupees One Hundred Fourteen Crores and Thirty Lakhs Only) through preferential allotment.
Reflecting on its market performance, the stock has demonstrated substantial resilience and growth, escalating by 95.2 per cent over the past year, coupled with a commendable 22.84 per cent surge over the preceding three months.
Disclaimer: The article is for informational purposes only and not investment advice.