Vivimed Labs gains after subsidiary divests certain products

Vivimed Labs rose 3.08% to Rs 77 at 12:55 IST on BSE after the company's wholly owned subsidiary, Klar Sehen transferred and sold identified products along with their associated trademarks.

The announcement was made on Saturday, 23 July 2016.

Meanwhile, the S&P BSE Senses was up 127.12 points or 0.46% at 27,930.36.

On BSE, so far 38,254 shares were traded in the counter as against average daily volume of 41,866 shares in the past one quarter. The stock hit a high of Rs 80 and a low of Rs 76.35 so far during the day. The stock had hit a record high of Rs 97 on 12 January 2016. The stock had hit a 52-week low of Rs 46.94 on 25 August 2015. The stock had underperformed the market over the past one month till 22 July 2016, falling 2.8% compared with Sensex's 3.88% rise. The scrip had also underperformed the market in past one quarter, declining 11.7% as against Sensex's 7.61% rise.

The small-cap company has equity capital of Rs 16.20 crore. Face value per share is Rs 10.

Vivimed Labs said that as a part of the transaction, Klar Sehen will divest certain products within its portfolio to Ordain Healthcare Global Private Limited, a subsidiary of Spain based Chemo Espana S A. The total consideration for the identified product lines is Rs 73 crore. Further, Klar Sehen will provide contract manufacturing services for the divested products to Ordain Healthcare for an agreed period of time from its two plants located at Hyderabad and Kolkata.

Commenting on the development, Santosh Varalwar, Managing Director of Vivimed Labs said that as a part of the company's strategy, it has exited from the branded formulations in ophthalmology and will continue to focus on CMO and US generic business. Furthermore, the transaction will also provide the company enhanced financial flexibility by further reducing debt as company transitions into the next phase of growth.

On consolidated basis, Vivimed Labs' net profit dropped 29.7% to Rs 12.61 crore on 2.5% drop in net sales to Rs 347.16 crore in Q4 March 2016 over Q4 March 2015.

Vivimed Labs is a leading manufacturer and exporter of specialty chemicals mainly used in the personal-care and pharmaceutical industries.

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