The shares of Wockhardt Ltd appreciated to the tune of 6.82% after the company during its investor meeting made an announcement about restructuring. Its shares reached an intraday high of ₹ 205.95 apiece on the National Stock Exchange (NSE).
Wockhardt is a global pharmaceutical and biotechnology organisation engaged in manufacturing finished dosage formulations, injectables, biopharmaceuticals, orals and topicals.
The company announced that the restructuring of its business would lead to annual savings worth $12 million. It would include the shutting down of its manufacturing facility at Morton Grove. A few products with high-profit margins will be manufactured by a third party. The company will continue to maintain sales with 40% gross margins.
In another development, the company has also signed an agreement with the Serum Institute of India to manufacture vaccines at its UK facility for which it has received 10 million Pounds as a contribution to reserving capacity. The joint venture of 51:49 is in favour of Wockhardt. The Serum Institute of India has identified two vaccines and Wockhardt plans to manufacture them post regulatory approvals and exhibit batches in the next 8 to 12 months.
In March 2022, Wockhardt and Serum Life Sciences, a subsidiary of Serum Institute of India (SII), entered into a partnership to make 150 million doses of SII vaccines in Wockhardt’s UK plant. Serum Life Sciences looks after SII’s global expansion plans, while Wockhardt had been looking at vaccine manufacturing partnerships.
Wockhardt has a market capitalization of ₹ 2,778 crores and is a small-cap company. Its shares were trading at a price-to-earnings ratio of 6.87, which is significantly lower than the industry P/E of 29.45, indicating that the stock might be undervalued as compared to its peers. The company has an ideal debt-to-equity ratio of 0.62.
Written by Simran Bafna
