Shares of Bajaj Healthcare Ltd. rose over 6% after the company said it has become the first private firm in India to get contracts from the government for opiate processing.
According to an exchange filing, the firm has won two letters of award.
1. To manufacture alkaloids and APIs from processing of 500 MT of unlanced poppy capsule along with straw on an annual basis.
2. To manufacture alkaloids and APIs from processing of 100 MT of opium gum on an annual basis.
The company said it will execute both these tenders at their API manufacturing unit located at Savli, Gujarat.
"The APIs will be manufactured under highly regulated conditions and under strict adherence to protocols prescribed by the Government of India," it said in a statement. "The tender is expected to bring an overall margin accretion to the company, mainly on account of better capacity utilisation of the existing plant. The derivate APIs and extracts are normally used in a wide range of pharmaceutical applications.
Anil Jain, joint managing director at Bajaj Healthcare, said the order was a part of the company's strategy toward building a portfolio of opiates and accessing capabilities in this segment. "We have been awarded two tenders... under long-term contracts and expect successive orders under similar tenders, to scale-up to processing of around 6,000 MT of poppy straw and opium gum in the next five years."
Shares of the company gained as much 6.1% before closing 4.6% higher on Wednesday. The stock has posted a six-day winning streak.
Its trading volume is 31 times the 30-day average volume. The Relative Strength Index of the stock is 76, suggesting it may be 'overbought'.
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