Smallcap pharma stock soars 34% in 6 days; doubles investor money in 4 mths

Vimta Labs share price hit a new high of Rs 1,127.40 as it rallied 8% on the BSE in Wednesday's intra-day trade, extending its gain on healthy operational performance in Q3FY25

Vimta Labs share price hit a new high of Rs 1,127.40 as it rallied 8 per cent on the BSE in Wednesday's intraday trade, extending its gain on healthy operational performance in the December 2024 quarter (Q3FY25). In the past six trading days, Vimta Labs stock price has surged 34 per cent. In four months, it has zoomed 102 per cent.

 

At 11:49 AM, stock of the smallcap pharmaceutical company was quoting 6 per cent higher at Rs 1,104, as compared to 0.4 per cent decline in the BSE Sensex and BSE Smallcap index.

 

While clarifying to the stock exchanges, Vimta Labs said that the movement in the share price of the company is purely due to market factors and not specifically related to the company.

 

"The company has made all the necessary prompt disclosures within the stipulated timelines and has not withheld any events/information announcement including impending announcement, including any price sensitive information that may have a bearing on the operation/performance of the company or on the price behaviour in the scrip," Vimta Labs said on today.

 

Headquartered in Hyderabad, India, Vimta Labs is a leading contract research and testing organisation, providing food, agri, bio/pharmaceutical, medical device, speciality chemical, and electronics companies an integrated scientific, technical, and regulatory expertise to support all stages of product development and manufacturing process. Vimta Labs also provides environmental assessments and testing services.

 

In Q3FY25, the company's earnings before interest, tax, depreciation and amortisation (Ebitda) margin improved 496 bps year-on-year (Y-o-Y) and 184 bps quarter-on-quarter (Q-o-Q) to 37.6 per cent.

 

Vimta sold its Diagnostic and Pathological services business to Thyrocare Technologies, as announced on August 30, 2024, with the transfer completed on October 11, 2024. This decision allowed the company to sharpen its focus on core services and optimise resources for sustained growth, resulting in a significant improvement in Ebitda margins.

 

Total income grew 21.1 per cent Y-o-Y at Rs 91.1 crore, mainly pushed by the drug development and discovery services. Profit after tax (PAT) jumped 43 per cent Y-o-Y at Rs 17.5 crore. On a sequential basis, PAT was up 2.9 per cent.

 

Vimta Labs is positive about its growth prospects in the biopharmaceutical, food, environmental, and electronics and electrical contract testing and research markets, all of which have a strong positive outlook despite the current global economic uncertainties, large competition, and stricter regulatory compliance requirements.

 

The business operations of Vimta Labs are expected to continue to benefit from its established presence in the industry, sustained healthy profitability margins and a conservative capital structure.

 

The factors driving industry growth include, increasing demand for new drug innovations, growth in biologics and vaccine products development, and increasing regulations in pharma and biotech industry.

 

The growing international food regulations, evolving Indian food safety regulations, growing world population, and increasing demand for independent third-party inspection & testing to drive food testing business. The surge in demand for certification services of electrical & electronic products, growing defence budgets and make in India initiatives. The green push by the Government for electrical vehicles will lead to electrical and electronics testing," Vimta Labs management said in the Q3 results investor presentation.