5:1 Stock Split and 22,500 per cent returns: This multibagger pharma distribution company acquired new manufacturing facility in Hyderabad; approx. Rs 38 crore investment!

The shares of the company have an ROE of 71 per cent and a ROCE of 103 per cent.

Remedium Lifecare Ltd, a company currently involved in trading and distributing pharmaceutical ingredients, is looking to expand its operations by acquiring a manufacturing facility in Hyderabad, India. This acquisition would mark a significant shift for the company, as it would transition Remedium Lifecare from a purely trading company to one that also manufactures pharmaceutical intermediates.

The new facility, located at Phase 2, Survey No.10, Gaddapotharam Industrial Area, Jinnaram Mandal, Medak, Sangareddy District, Hyderabad-502319, Telangana, India, is equipped to produce these intermediates and has a total area of 1,30,680 square feet. Upon successful acquisition, Remedium Lifecare plans to establish an ultramodern solvent recovery plant at the facility, specifically designed to service the pharmaceutical and speciality chemicals sectors.

The total consideration for the acquisition is estimated to be around Rs 38 crore and will be paid out over multiple milestones. The Board of Directors of Remedium Lifecare has approved the initiation of due diligence for the property, and if all goes well, the acquisition is expected to be finalized by June 30th, 2024. This move is anticipated to bring several benefits to Remedium Lifecare, including reduced dependence on external suppliers, improved profit margins due to manufacturing capabilities, and the establishment of valuable capital assets for the company. Additionally, the new facility is expected to allow Remedium Lifecare to provide its existing customers with a reliable domestic source of pharmaceutical intermediates.

Earlier, the company bagged an international order worth Rs 169 crore from Pharmyka General Trading LLC; a Pharmaceutical Company Situated in UAE. The order includes the supply of pharmaceutical chemicals from April 2024 to March 2025 and the payment will done 120 days from the billing date.  

Today, shares of Remedium Lifecare Ltd hit 10 per cent to an intraday high of Rs 127.25 per share from its previous closing of Rs 115.70. The stock’s 52-week high is Rs 179.66 and its 52-week low is Rs 11.16.

Remedium Lifecare Ltd is in the business of trading in advanced pharmaceutical intermediates and other pharma products. The company has a market cap of over Rs 1,250 crore with a 3-year stock price CAGR of 300 per cent.

The company experienced significant growth across all financial periods. In Q3FY24, net sales surged by 939 per cent and net profit skyrocketed by 4,425 per cent compared to Q3FY23. Similarly, in 9MFY24, net sales increased by 506 per cent and net profit grew by 747 per cent year-over-year. While the growth slowed down in FY23, net sales still managed to increase by 1 per cent and net profit rose by a remarkable 400 per cent compared to FY22.

Additionally, the Board of Directors of the company’s shares have ex-traded sub-division of the company's 1 (one) equity share of face value of Rs 5 each into 5 (five) equity shares of face value of Rs 1 each held as of the record date. The ex-record date was today, Friday, February 23, 2024.

The shares of the company have an ROE of 71 per cent and a ROCE of 103 per cent. The stock gave multibagger returns of 970 per cent in just 1 year, 7,320 per cent in 3 years, and a whopping 22,500 per cent in 5 years. Investors should keep an eye on this Small-Cap stock.

Disclaimer: The article is for informational purposes only and not investment advice.