Why Sequent Scientific Share Price is Rising

Imagine a sinking ship, tossed about by stormy waves, with the crew scrambling to keep it afloat. Panic spreads, and everyone is certain the ship will go down. But just as all hope seems lost, the storm begins to clear, and in the distance, a lighthouse shines through the darkness.

Suddenly, the mood shifts, panic turns to relief, fear is replaced by hope, and the crew starts to believe they'll make it after all. That's how one small beacon of good news can completely change the sentiment, even when things look bleak.

This holds true for stock market too. One good news can cause a significant change in the share price trajectory of a company. A similar shift is happening with Sequent Scientific right now.

Sequent Scientific is a leading name in the animal healthcare industry, offering a wide range of veterinary pharmaceutical products to over 100 countries.

Last Friday, the stock rallied by 18% after its latest news hit the markets.

The company has built a strong reputation for delivering innovative and affordable veterinary solutions, making it a key player in the global animal healthcare space.

Let's take a look at the announcement driving up Sequent Scientific's share price.

Merger with Viyash Life Science

Sequent Scientific and Viyash Life Sciences, both investees of Carlyle, have announced a merger that is expected to create a leading platform in the animal pharmaceuticals sector.

The merger will also strengthen their overall presence in the larger global pharmaceutical market, with a focus on research and development.

The merger deal is valued at Rs 700-800 billion (bn). According to the agreement, Viyash Life Sciences shareholders will receive 56 Sequent Scientific shares for every 100 shares they hold.

This move will expand Sequent Scientific's total shares to around 429 million (m) from 249 m. Post-merger, the promoters will hold approximately 62.4% of the combined entity.

For the 2023-24 financial year, Sequent Scientific posted an operating profit of Rs 10 bn, while Viyash Life Sciences reported an operating profit of Rs 15 bn. Sequent Scientific's CEO, Rajaram Narayanan, stated that the merger will significantly boost the company's R&D capabilities, helping it remain competitive by expanding its product development.

The founder of Viyash Life Sciences, Haribabu Bodepudi, has extensive experience in the pharmaceutical industry, including his role at Mylan, now Viatris. He aims to leverage both companies' technical skills and global customer bases.

The merger is also expected to facilitate backward integration and create procurement synergies.

Currently, the combined entity will operate 16 manufacturing plants, with 10 already approved by the USA Food and Drug Administration (FDA). Viyash is a key supplier of intermediates for one of Sequent's largest active pharmaceutical ingredients for the US market.

This merger is a major factor driving Sequent Scientific's recent share price surge. Investors view the merger as a strategic move that strengthens the company's position in a growing market, enhances operational capabilities, and boosts profitability.

These synergies are seen as strong indicators of future growth, which has sparked investor confidence and pushed Sequent Scientific's stock higher.

What Next?

Sequent Scientific is focusing on a major transformation with its "Sequent 3.0" strategy. The company aims to create a unique, global leader in animal health by building fully integrated capabilities.

One of its key goals is to capture more market opportunities by enhancing its research and development, expanding its manufacturing scale, and strengthening long-term partnerships.

In the future, Sequent plans to increase its share of business from top customers by investing further in R&D. This will help the company accelerate drug filings and capture a larger portion of the drug pipeline.

It will also work on improving its manufacturing capacity to enhance operating leverage and remain cost-competitive while maintaining the highest regulatory standards.

Sequent also aims to build a more robust supply chain, minimising its reliance on external suppliers. This focus on quality control will help it deliver consistent, reliable products.

The company also plans to expand its direct sales footprint in multiple geographies, deepening its relationships with large pharmaceutical clients.

Inorganic growth will be a key part of Sequent's future strategy. Over the last year, the company has been working to strengthen its capabilities and sees potential in acquiring other players to establish market leadership.

Looking ahead, the company is committed to building on these pillars to become a dominant force in the animal health industry.

How Sequent Scientific Share Price has Performed Recently

In the past five days, Sequent Scientific share price has rallied 30%. In the last month, it is up 44.2%.

In 2024, so far its share price has rallied 102.3% and has surged 152.6% in the last year.

The stock touched its 52-week high of Rs 237.8 on 30 September 2024 and a 52-week low of Rs 90.6 on 4 October 2023.

About Sequent Scientific

Sequent Scientific is an India-based animal health company.

The company provides a wide range of animal health products, including finished dose formulations, active pharmaceutical ingredients (APIs), as well as analytical services.

Its subsidiaries include Alivira Animal Health and Sequent Research.

For more details about the company, you can have a look at the Sequent Scientific fact sheet and quarterly results on our website.

For a sector overview, read our pharmaceuticals sector report.

To know what's moving the Indian stock markets today, check out the most recent share market updates here.

Happy investing!

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...