Vikas Lifecare shares rises 4% as its R&D unit receives government recognition

Vikas Lifecare's shares rallied 4 per cent during early trade on Tuesday after the company's in-house research & development (R&D) unit received recognition from the Government of India. The Department of Scientific and Industrial Research (DSIR), which is under the Ministry of Science and Technology, has provided the recognition, the company said in an exchange filing.

DSIR recognition set-up by the Government of India for benchmarking of industrial R&D acknowledges the company's in-house R&D activities, the filing said.

Vikas Lifecares' shares jumped 4 per cent to Rs 4.65 on Tuesday, before giving up gains to trade at Rs 4.58 at 10.30 am. The penny stock had settled at Rs 4.48 on Monday. The trading and distribution company commanded a marketcap of Rs 675 crore.

Vikas Lifecare's shares have plunged more than 30 per cent in the last one month, whereas the stock has surged 75 per cent since May 2021. The stock has lost 45 per cent of its value from its 52-week high of Rs 8.15 in January 2022.

DSIR recognition for the company's R&D unit makes it eligible for receiving funds for R&D purposes from various government departments and agencies, and enables it to invest further into necessary equipment with reduced or zero tax liability.

R&D equipment could be imported with 100 per cent custom duty exemption whereas domestic equipment purchases will attract reduced GST rate of 5 per cent only. The benefits will reduce the company's expenses and improve its operational performance and net profit.

In case a product arising out of the R&D unit is patented in India and one more from another country (the US, China, or EU), the product can be sold without any excise duty for a period of three years.

Vikas Lifecare is engaged in various business segments including polymer & rubber commodity, compounds and master-Batches. It also manufactures up-cycled compounds from industrial and post-consumer waste and scrap materials. It also provides a wide variety of base polymers and commodity raw material to ONGC.

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