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Shares of Vimta Labs and WPIL have rallied by up to 15 per cent on the BSE in Monday’s intra-day trade on expectation of strong earnings. In one month, the market price of these smallcap stocks zoomed by up to 63 per cent after reporting a robust results for the second quarter ended September 2024 (Q2FY25). In comparison, the BSE Sensex and BSE Smallcap index are up 0.6 per cent and 2 per cent, respectively.
Individually, Vimta Labs hit a new high of Rs 878, surging 15 per cent on the BSE in intra-day trade today. In one month, the stock of leading contract research and testing organisation has zoomed 63 per cent as the company reported more than doubled its profit after tax (PAT) at Rs 17.0 crore in Q2FY25. It had posted PAT of Rs 8.1 crore in the year ago quarter.
The company’s revenue grew 26.4 per cent year-on-year (Y-o-Y) at Rs 85.4 crore. Earnings before interest, tax, depreciation and amortization (Ebitda) rose by 57.3 per cent Y-o-Y at Rs 30.6 crore; margins improved 704 bps at 35.8 per cent. The strong performance was primarily driven by the company’s pharmaceutical services, which continue to lead the business.
Vimta Labs has divested the diagnostic and pathological services business to Thyrocare Technologies. This decision allows the company to sharpen its focus on core services and optimize resources for sustained growth, resulting in a significant improvement in Ebitda margins, the management said. Looking ahead, the management expects pharmaceutical services continue to show promising growth, and anticipate that food testing services will also contribute to growth in coming quarters.
Meanwhile, shares of WPIL hit a new high of Rs 648, as they rallied 9 per cent on the BSE in Monday’s intra-day trade. In one month, the stock soared 62 per cent as the company posted a 63.6 per cent Y-o-Y jump in consolidated PAT at Rs 70.22 crore for Q2FY25. The company had reported a PAT of Rs 40.81 crore in the year ago quarter.
Revenue from operations grew 54 per cent Y-o-Y to Rs 490.89 crore from Rs 318.74 crore in Q2FY24. Ebitda rose 56.6 per cent to Rs 104.34 crore, while margins improved to 21.26 per cent from 20.91 per cent. The company has a total order book of around Rs 3,665 crore.
As of September 30, 2024, WPIL’s international order books stood at Rs 534 crore. In the domestic order book, the project business stood at Rs 2,730 crore, while the domestic product business was around Rs 401 crore.
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On the operation front, the management said the company witnessed a strong performance in the domestic business driven by both the product and project divisions. With a positive outlook, supported by a growing product portfolio and a strong market presence, as well as excellent prospects on the export front from the company’s international operations, the company said.
WPIL is engaged in the business of providing fluid handling solutions – from supply of pumps to turnkey project execution. It supplies a comprehensive range of pumps to the Industrial, municipal, irrigation and power sector. The company also has a strong project division which undertakes water management contracts in the above sectors.
WPIL, in its investor presentation, said that the outlook for its product division is improving based on product portfolio expansion and strong market presence. It also sees excellent prospects for exports from its international operations.
The company's project execution momentum has gained traction, with growth expected to continue in the second half of the financial year after the monsoon season. Moreover, its project commissioning has remained on schedule over the past two quarters.
The company is actively pursuing new contract opportunities, anticipating an increase in the pace of new tenders in the second half of the financial year, the company said.
The company's international business operations remain stable and the outlook remains strong across all businesses. Its unit Gruppo Aturia has been benefitting from a strong after market performance and awaits revival of a large number of delayed contracts in the MENA region for growth. With large investments announced in South Africa for both water and power, growth prospects for the company look exciting.
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