The Hindu Business Line : Medicamen Biotech jumps 85 per cent in a week

IN the list of small cap companies without strong financials, a stock that is witnessing increased interest is the Delhi-based Medicamen Biotech. The stock price of the company has increased almost 85 per cent in just over a week's time. The stock gained from Rs 7.97 on July 14 to today's closing price of Rs 14.68 on BSE. During this period, the volume in the counter has also jumped from 2,999 shares to 89,651 shares. Today, the stock gained 19.93 per cent at Rs 14.68.

Brokers said there are hardly any strong fundamentals of the company that warrants such a sharp rise in the stock price. "Medicamen Biotech's financial performance is not good and it is better to avoid such stocks," said a dealer with a domestic broking firm.

Another broker said several market players are now manipulating the stock price of small cap pharma companies and within this sector companies which have biotech name attached to them are witnessing sharp increase in their stock price.

A look at the financial performance of the company shows that it reported net profit of Rs 46.1 lakh on revenues of Rs 48.78 crore for the financial year ended March 2004. While in the fourth quarter ended March 2004, it reported a net loss of Rs 21.3 lakh on revenues of Rs 14.7 crore.

Brokers said in the last few months, there has been rise in the stock price of several illiquid stocks. This trend is more prominent in shares of companies, which do not have strong fundamentals.