Vikas EcoTech shares rebound 4% after Q1 results, debt reductions plans

Shares of Vikas Ecotech rebounded from its early cuts and surged 4 per cent during the session on Wednesday after the company announced a strong quarter performance for the quarter ended on June 30, 2023. The company also announced to reduce its debt in order to become debt free.

Vikas EcoTech reported a slight increase in the net profit from operations on a year-on-year (YoY) basis at Rs 1.55 crore in the June 30 quarter. The company's net profit came in at Rs 1.46 crore in the same quarter previous year, it said in an exchange filing.

Vikas EcoTech has paid back Rs 7 crore in order to reduce bank-debt to Rs 65 crore. The company has reduced its bank-debt substantially from its peak at Rs 96.2 crore. The company has set a goal for becoming a 100 per cent debt-free entity within
the current financial year, it said in another exchange filing.

Shares of Vikas EcoTech rebounded about 4 per cent to Rs 3.04 from its low at Rs 2.93 apiece. The company's total market capitalization stood close to Rs 350 crore. The scrip had settled at Rs 3 in the previous trading session on Monday.

Post the current prepayment, the company intends also to payback additional Rs 10 crore before the close of this quarter, bringing down the debt levels to about Rs 55 crore, supporting it to achieve its 'zero-debt' status withing the financial year 2023-24, it added.

The company had recently announced that it has received an order worth Rs 50 crore for more than 1000 tonnes of niche grades of thermoplastic elastomers (TPE), thermoplastic rubber (TPR), thermoplastic vulcanizates (TPV), organotin heat stabilizers (MTM), and flame-retardant aluminum trihydrate (ATH) compounds.

Prior to this, Vikas EcoTech ventured into Green infrastructure development projects in collaboration with ARM Estate Projects, which had an estimated cost of about Rs 50 crore including the cost of lands and the expenses for the construction and development of commercial buildings at two locations in Gurugram, Haryana.

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The New Delhi-based Vikas EcoTech is engaged in the business of specialty polymers for applications in sectors like electrical, infrastructure, packaging, and automotive, among others. The company had recently launched funds through qualified institutional placement, while also reducing debt from its books.

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