Shilpa Medicare is witnessing positive action on July 13; here's why

Its Bangalore facility received the 'Good Manufacturing Practice' certificate from UK MHRA.

Shilpa Medicare is in the business of manufacturing high-quality Active Pharmaceutical Ingredients (APIs), Intermediates, Formulations, New Drug delivery systems, Peptides, Biotech goods, and Specialty chemicals.

After 2 days of negative price action, the market is trading in the green on July 13. At 11:30 am, the S&P BSE Sensex is trading 0.21% higher at 54000. Realty, Telecom, and FMCG are top-performing sectors today.

Talking about stock-specific action, Shilpa Medicare Limited is in strong momentum on July 13. At 11:30 am, the shares of Shilpa Medicare Limited are trading at Rs 417.45 with a 4.86% gain for the day.

The stock is rallying on the back of the news regarding the company’s Dabaspet, Bangalore, Karnataka facility receiving GMP (Good Manufacturing Practice) Certificate from UK MHRA.

The United Kingdom's Department of Health and Social Care's executive agency, the Medicines & Healthcare Products Regulatory Agency (MHRA), makes sure that drugs and medical equipment function as intended and are safe enough to use.

The company stated in a regulatory filing that the Dabaspet facility can produce and test specialised dosage forms such as Orodispersible Films and Transdermal Systems. The facility is supported by extensive research and development of difficult orodispersible films and transdermal technologies. It is also fully equipped with cutting-edge infrastructure to meet global commercial requirements. The company specializes in supplying Oncology/ Non-Oncology API and intermediates.

Talking about financials, the company has delivered strong growth in its revenue. FY22 was the biggest year for the company in terms of revenue numbers. The revenue grew by 27.2%. However, there was a decline in its net profit margins from 16.4% in FY21 to 5.3% in FY22 due to higher depreciation & tax expenses.

As per the FY22 period ending, the company has an ROE and ROCE of 3.35% and 5.58%, respectively. The shares of Shilpa Medicare are trading at a PE multiple of 65.4x.