Venus Remedies fell 15.64% to Rs 319.30 at 12:45 IST on BSE after ratings agency CRISIL downgraded its ratings on the company's bank facilities to D from BB+.
Meanwhile, the BSE Sensex was down 96.23 points, or 0.36%, to 26,720.33.
On BSE, so far 9.43 lakh shares were traded in the counter, compared with an average volume of 66,086 shares in the past one quarter.
The stock hit a high of Rs 379.90 and a low of Rs 316 so far during the day. The stock hit a 52-week high of Rs 381.75 on 15 September 2014. The stock hit a 52-week low of Rs 180 on 30 September 2013.
The stock had outperformed the market over the past one month till 15 September 2014, rising 54.93% compared with 2.73% rise in the Sensex. The scrip had also outperformed the market in past one quarter, rising 34.32% as against Sensex's 6.30% rise.
The small-cap company has an equity capital of Rs 11.44 crore. Face value per share is Rs 10.
CRISIL has downgraded its ratings on the bank facilities of Venus Remedies (VRL) to 'CRISIL D/CRISIL D' from 'CRISIL BB+/Stable/CRISIL A4+'.
The rating downgrade reflects delays in repayment of term loan by the company driven by a stretched liquidity. VRL's stretched liquidity is on account of the significant increase in total cost of the large debt-funded capital expenditure over the past one year and high working capital requirements. The company is undertaking capex towards setting up marketing office. The total cost of this capex is estimated to have increased by about Rs 10 to 15 crore. In addition to the above company's liquidity has also deteriorated on account of the high working capital requirements reflected by inventory of about 131 days as on 31 March 2014, CRISL said in a report issued on Monday, 15 September 2014.
The ratings continue to reflect VRL's comfortable financial risk profile, marked by a healthy net worth and strong debt protection metrics. The ratings also factor in the company's strong presence in the high-value critical care segment and the healthy growth in its domestic and export sales. These rating strengths are partially offset by VRL's working-capital-intensive and small scale of operations in the overall formulations market, CRISL said.
For arriving at the ratings, CRISIL has combined the business and financial risk profiles of VRL and its wholly owned subsidiary, Venus Pharma GmbH (VP), based in Germany. VP provides out-licensing services of common technical documents, and warehousing and logistical support to VRL. The two entities have together been referred to as VRL, CRISIL added.
Venus Remedies' net profit fell 33.1% to Rs 10.25 crore on 4.6% decline in net sales to Rs 120.81 crore in Q1 June 2014 over Q1 June 2013.
Venus Remedies is a fully integrated pharmaceutical company. It manufactures products in critical care segments such as anti cancer, anti infective, neurology, skin & wound care, and pain management.
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