Penny stock Vikas Lifecare Limited (VLL) climbed nearly 6 per cent during intra-day trading on Monday, December 16, following the announcement of a strategic partnership with the Defence Research and Development Organisation (DRDO).
The company said it has entered into a Technology Transfer Agreement with DRDO’s Advanced Systems Laboratory (ASL) to manufacture and market bio-degradable plastics, a development that aligns with the rising demand for sustainable packaging solutions.
“Vikas Lifecare Limited (VLL) has entered into a Technology Transfer Agreement with the Advanced Systems Laboratory (ASL), DRDO, Ministry of Defence, Government of India, Hyderabad. This collaboration centres around the breakthrough technology developed by DRDO for “Granules for Biodegradable Bags,” offering a sustainable alternative to conventional single-use polyethylene bags,” the company said in a press release.
While DRDO is primarily recognised for its contributions to defence and strategic technologies, it has also undertaken significant research in areas with broader societal applications, including environmental sustainability and industrial innovation.
The company emphasised that the biodegradable granules technology offers notable economic advantages by providing a cost-effective alternative to traditional polyethylene bags. This innovation is expected to address the increasing global demand for eco-friendly packaging, especially as the Indian plastic packaging market is projected to grow from $21.77 billion in 2024 to $25.35 billion by 2029, reflecting a compound annual growth rate (CAGR) of 3.09 per cent.
Agreement Details
The terms of the agreement grant Vikas Lifecare a non-exclusive license to manufacture and market biodegradable granules domestically and internationally for a period of 10 years. The technology transfer from DRDO includes detailed technical support, such as drawings, specifications, material sources, testing protocols, and other critical documentation.
Vikas Lifecare stated that the agreement underscores its commitment to developing cutting-edge biodegradable plastics technology in collaboration with DRDO. The company sees this as a strategic pivot towards sustainable innovations that address environmental concerns comprehensively while enhancing its market position.
Stock Performance
The announcement had a positive impact on the company’s stock price, with shares rising as much as 5.7 per cent to an intra-day high of ₹4.59. Despite this uptick, the stock remains 42 per cent below its 52-week high of ₹7.92, recorded in January 2024. However, it has risen over 13 per cent from its 52-week low of ₹4.05, reached in November 2024.
Over the last year, the penny stock has consolidated, delivering positive returns in five months of the year. After losing over 7 per cent in November, the stock has recovered nearly 6 per cent in December.
On the financial front, Vikas Lifecare’s net profit declined by 67.35 per cent to ₹2.39 crore in the quarter ended September 2024, compared to ₹7.32 crore in the corresponding quarter of the previous year. However, the company’s sales rose by 16.25 per cent, reaching ₹134.88 crore in Q2 FY25 from ₹116.03 crore in Q2 FY24.
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