Multibagger penny stock in focus amid debt reduction plans; co aims to become debt free in FY24

Multibagger microcap company Vikas EcoTech has announced the repayment of debt in order to move ahead on its plans to become a debt free entity in the ongoing financial year. Shares of Vikas EcoTech were trading flat during the trading session on Thursday.

Vikas Ecotech has repaid bank debts by Rs 7.3 crore, taking the total amount of bank-debt reduced to Rs 71.8 crore and the overall bank-debt reduction to Rs 98.2 crore from the peak level of about Rs 170 crore till date, the company said in an exchange filing.

In addition to this current repayment, the company intends to pay-back additional Rs 17 crore with the current quarter ending on June 30, 2023, bringing down the debt levels to Rs 54.8 crore paving the way towards becoming a ‘zero-debt company,' the filing added.

Shares of Vikas EcoTech were range-bound during the trading session on Thursday as the stock was seen at Rs 3.42 at 1 pm, slightly lower than its previous close at Rs 3.43 on Wednesday. The company was commanding a total market capitalisation of more than Rs 385 crore.

Shares of Vikas EcoTech have rallied about 20 per cent in the current month, while the stock has been flat in the year 2023 so far. The stock has turned multibagger in the last three years as it surged more than 400 per cent from its Covid-19 lows.

The company had recently shared strong business updates from its polymer compounds division, which bagged fresh orders for specialty compounds valued at around Rs 9 crore. The speciality compound sales registered so far during Q1 of the current fiscal is Rs 19.7 crore and the target for the current quarter is Rs 28.5 crore.

Vikas Ecotech reported a 46 per cent increase on a year-on-year (YoY) basis in its net profit at 1.79 crore in the March 2023 quarter, against a net profit of Rs 1.23 crore in the year ago period. The company had clocked a net profit at Rs 2.78 crore in the December 2022 quarter.

The New Delhi-based company is engaged in the business of specialty polymers for applications in sectors like electrical, infrastructure, packaging, and automotive, among others.

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