Penny stock under Rs 5 - Up 45 per cent from its 52-week low: Company reports a 28.5 per cent jump in net profit to Rs 2.30 crore

The stock is up by 45 per cent from its 52-week low of Rs 2.82 per share.

Vikas Ecotech, a leading manufacturer of speciality chemicals and polymers in Delhi, caters to a wide range of industries with stabilizers, plasticisers, and other additives. They are a unique player in the global market, being the only Indian manufacturer of organotin (a key stabilizer) with in-house R&D, and are constantly expanding through acquisitions, like a recent plasticizer business and a steel company for infrastructure projects. Vikas Ecotech also includes Vikas Organics, a well-established plasticizer producer with a strong domestic and international presence.

According to Quarterly Results, the net sales increased by 5 per cent to Rs 71.73 crore and net profit increased by 28.5 per cent to Rs 2.30 crore in Q4FY24 compared to Q4FY23. In FY24, the company reported net sales of Rs 258.63 crore, operating profit of Rs 19.78 crore and net profit of Rs 6.85 crore compared to net sales of Rs 402.67 crore, operating profit of Rs 24.82 crore and net profit of Rs 9.53 crore in FY23.

Vikas Ecotech Limited (VEL) recently acquired Shamli Steels Private Limited through a share swap. To achieve this, Vikas Ecotech issued 38,03,50,000 new equity shares to the public shareholders of Shamli Steels at Rs 4.20 per share, representing a premium of Rs 3.20. This effectively swapped 20 Vikas Ecotech shares for 1 Shamli Steels share, resulting in a total acquisition value of Rs 160 crores. The issuance was approved by Vikas Ecotech's shareholders and received in-principle approval from the Bombay Stock Exchange (BSE) and the National Stock Exchange of India (NSE). The new Vikas Ecotech shares have the same rights as existing shares and will be listed on both exchanges. This share issuance increases Vikas Ecotech's issued share capital to Rs 1,76,87,06,024 and makes Shamli Steels a wholly-owned subsidiary.

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In a separate development, Vikas Ecotech's recently acquired subsidiary, Vikas Organics (VOPL), secured its largest export order ever. This variable price contract, valued at approximately Rs 165 million, involves regular supplies of vinyl plasticizers to the prestigious Yusuf Bin Ahmed Kanoo Group in Saudi Arabia. Both VEL and VOPL are working together to leverage their expertise and existing export experience to strengthen their international presence. Additionally, VEL is significantly upgrading VOPL's manufacturing facilities in Daman to improve efficiency, increase capacity, and enable the production of new plasticizer variants. This expansion aims to solidify VEL's position as a key player in the global plasticizer market.

Today, shares of Vikas Ecotech Ltd gained 2.76 per cent to an intraday high of Rs 4.09 per share from its previous closing of Rs 3.98 with a spurt in volume by more than 1.1 times on BSE. The company has a market cap of Rs 547 crore. The stock’s 52-week high is Rs 5.63 and its 52-week low is Rs 2.82. The stock is up by 45 per cent from its 52-week low of Rs 2.82 per share.  

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