Caplin ties up with Fresenius Kabi for the supply of two drugs. Looks like they are entering into the big league now, but the stock is already trading at 50+ pe and up almost 3 times in past three months.
Ranjit, I have been tracking but wont write on this forum which doggedly opposed all logical arguments in favor of the company because they could not extract enough information from the management. The deal with Fresenius Kabi, US is an endorsement to the company and its management.
I believe the Valuepickrs noticed this stock when it was in double digits, and it just touched 1350 today. Great find for people that had patience, I guess.
Hi Valuepickrs …this stock presented the biggest dilemma for me in my short investing career … i bought a chunky amount @70 …and it went down slightly from that 70 to 60 …and I bought more …and then it started shooting up …i got into it with long term view but such sharp appreciation made me greedy and i finally sold the whole holding at 700 …and guess what from there it now have jumped to 1300 … I dont think i had any idea … I was just plain lucky and I think its not good for me …as things like this always end up giving you false confidence and due to that you suffer later. So good luck to me. Just sharing my two cents so I can come back here some time in future and reflect !! …
thanks
Krish
Caplin Point just submitted to the exchanges the shareholding pattern,
link: http://www.bseindia.com/xml-data/corpfiling/AttachLive/Caplin_Point_Laboratories_Ltd_SHP_M15.pdf
Given the big run up of the share, thought it would be interesting to see the new shareholding pattern, and the promotor’s stake has gone up from 58% to 67%, with FII also having 1.52% holding
Caplin Point just submitted to the exchanges the shareholding pattern,
link: http://www.bseindia.com/xml-data/corpfiling/AttachLive/Caplin_Point_Laboratories_Ltd_SHP_M15.pdf
Given the big run up of the share, thought it would be interesting to see the new shareholding pattern, and the promotor’s stake has gone up from 58% to 67%, with FII also having 1.52% holding
I can not digest this ’ advance system’ of revenue. I doubt if it is legal. But the question is," is it possible for market to be irrational for such a long time."
HI Arjun
I could not have written this better. Very well put.
Does any one following this stock ?
Why this stock crack from 1400 to 1080 in just 10 days without any reason (except market volatility) ? I added at 1400 and I feel that I trapped.
Can I exit or ?
At 960 it is Trading at 32x TTM EPS of 30. So may be market is now started to give reasonable growth rather than High Growth. Just My view. May be members who are tracking it more closely can share.
Disc: following since 1300. Added token qty at 1090 and 980.
Q3 Result Estimation
Last Qtr result analysis :
Take away from this result is margin is now stable at 26.8%
last year QoQ growth analysis :
Take away from this analysis is probability of Sales Q2 and Q3 are almost same or (5.20+10.50)/2 = ~7% QoQ Sales growth possible.
Based on above analysis, QoQ growth can be 7% and margin should be same as last Qtr.
High Probability on Q3 2015 Result can be :
Sales can grow 38% 
but let’s be optimistic with 30% growth
PAT can grow 64% but base expectation is 13-14 Cr
Let’s hope for the best.
Result update for Caplin Point for Sep 15
Highlights:
YoY:
Revenue up 38.8% (YoY)
Operating profit (PBDT) up 80.29% (YoY)
Net profit/EPS up 66.67% (YoY)
QoQ
Revenue up 11.74% (QoQ)
Operating profit (PBDT) up 10.76% (QoQ)
Net profit/EPS up 11.9% (QoQ)
Change in shareholding pattern:
YoY: Over all Institutions holding up 3900% from 0.08% of the equity to 3.2% of the equity. In this FII’s have increased the stake from NIL last year to 3.11% of the equity this year.
QoQ: Over all Institutions holding up 76% from 1.82% of the equity to 3.2% of the equity. In this FII’s have increased the stake by 76% from 1.7% last qtr to 3.11% of the equity in this qtr.
The company is consistently beating its guidance of 25% of top line and bottom line growth.
Last 12 months eps is Rs 30.84 and current market price of Rs1299 leading to PE of 42.12
In No way the stock can be considered cheap but given the historical PE ratio’s of in excess of 60 found recently, the stock is trading at almost 50% discount. The results are yet to reflect the impact of diversification in to new Geographies and new products.
All in all its looks a good long term bet for me.
Disc: Invested
Recently, I have sent a mail to Caplin Point Investor mail id investor@caplinpoint.net
Seeking information on following points and awaiting a reply.
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The company is a govt approved star export house and all income of the company are derived through exports. In light of the above information, how the tax on the income is getting calculated , as per my limited information the your’s 100% EOU thus ideally their should not be any taxes on the company accounts.
So, the taxes paid by the company on income is MAT or some thing else, please part with the information. -
In April the Company signed agreements for ANDA with two firms and confirmed that the company has also received the first milestone payment from both the counter parties.
However, I could not find any information on financial aspect of any of the deals either in the results sections for both 30th June 2015 and 30th September 2015 nor in the Annual report for FY 2014-15.
Can you please share more information on the subject?
- Does the company has any growth projection for next 3-5 years wrt Revenues and Profits?
Not part of mail:
MAT is 18.5% of the total income even for 100% EOU’s. How come, the company is paying more taxes?
Source: http://www.indiafilings.com/learn/what-is-minimum-alternate-tax-mat/
Disc: Invested
Expected sales on next two quarters is Rs 86cr (31st Dec 2015) and Rs 90cr (31st Mar 2015), respectively. With expected sales growth of 41.83% and 41.4% for next two quarters vis a vis growth of 35.5% (Sep 15) and 46% (June 15)
Net profits of around Rs15 cr and Rs 16 crs for next two quarters. Expecting a margin of 17.55% and 17.77% for the respective quarters compared to the net profit margin of 18.16% (Sep 15) and 18.13% (June 15). Leading to eps of Rs 10 and Rs 10.5, respectively.
Basis of assumption:
The expected sales and profits are projected taking in to account weighted average growth of last 4 quarters.
Significant impact on profits can be seen if the company is able to improve its margins.
Red flags:
Hoping that recent floods had no impact on either production, sales and profits of the company. The disclosures of small companies are generally very bad and will not be known till the final results are announced.
Disc: Invested
Caplin don’t have any manufacturing unit in Chennai. The have only Corp office located in Chennai T.Nagar.
http://caplinpoint.net/factory.htm
Be careful while putting any red flag without any analysis about the company.
Thanks for the information.
Please read more than what news channels cover, 3 districts in TN and Pondicherry were badly impacted by rains. So, it’s good to finger out mistakes but it’s better to know the facts.
Strong Set of Number by Caplin
Sales Growth 31% 79 Cr
Profit Growth 76.1% 16.1 Cr
Disc : Invested
Result update for Caplin Point for Dec 15 (Standalone)
Highlights:
YoY:
Revenue up 34.3% (YoY)
Operating profit (PBDT) up 79.03% (YoY)
Net profit/EPS up 75.3% (YoY)
QoQ
Revenue up 2.2% (QoQ)
Operating profit (PBDT) up 9% (QoQ)
Net profit/EPS up 12.5% (QoQ)
Change in shareholding pattern:
YoY: Over all FII holding up 1233% from 0.3% of the equity to 4.0% of the equity.
QoQ: Over all FII holding up 25% from 3.2% of the equity to 4.0% of the equity.
The company is consistently beating its guidance of 25% of top line and bottom line growth.
Last 12 months eps is Rs 35.38 and current market price of Rs1194 leading to PE of 33.75. This is inline with the industry PE of 33.1
Maiden interim dividend of Rs 2.5 per share. Record date: 15th Feb 2016
My View:
The results of the company were better than the management guidance of 25% topline and bottom line growth. The results would have been impacted by rains in TN & Pondicherry but no disclosure from the management on that. So, I assume their was no impact.
Problem in global currency market: Most of the sales of the company is in Africa and Latin America, which is badly impacted by the current currency turmoil. Despite this, the company was not only able to post healthy growth in sales and net profit but was also successful in improving the operating and net profit margins by 170 bps and 140 bps, respectively.
Shareholders friendly management: We all need to agree that disclosures of small cap companies are not great and this company is not an exception. Given no response on my mail seeking information on impact of TN floods. On contrary the company has been a dividend payer since 2011 and that is increasing every year. In fact this time the company is paying an interim dividend Rs 2.5 per share. As famous people say dividend cannot be paid out of thin air, so company is making money.
Wishlist:
-
Stated dividend payout policy by the company. It will be even better if they start declaring quarterly dividend.
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Sub-division of shares: The liquidity of the company shares is quite low. They have taken steps like listing on NSE to improve the liquidity but given high promoter share of ~68% and FII’s owning another 4% and company being a small cap. They can improve the liquidity by sub-dividing share in Rs5, Rs 2 or Re 1 paid up.
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More disclosures: Obviously, the best the company can do is to start improving on its disclosures. Like impact of TN floods on sales and profit or revenues/margins from ANDA agreements and agreements alike.
Stock rating: Accumulate
The company is growing better than the market average. It deserves a premium PE and not just the normal PE. The PE of the company is down from peak of 57 hit last year to current 34. Better disclosures can help company command a premium over the peers. In the process helping the shareholders make money from the stock market. I expect the company to continue making new highs in the medium term if not immediate future.
Disc: Invested
Management of the company has always been humble and do not disclose any financial targets of the company other than expected growth of 20-25% in top line and bottom line for coming few years. I got hands on an article with Forbes Asia thanks to one of the fellow board member at MMB.
Following are the key take away from the interview:
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Company increased sales from $18Million in 2010-11 to $40Million in 2014-15 and expected to increase to $150Million till 2019-20. This will be almost 4x from the current year sales. So, if I take the FY2015-16 as base year and USD-INR rate as 1:66 that is CAGR of 32% for next 3 years.
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90% of their revenue comes from Latin America and only 10% from Africa. Even though the Latin American is bad wrt to crime rates. I personally feel it is way better than African sub continent. However, recent free fall in the fx rates can have impact on their sales expectations.
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More than 50% of their revenue is basically a trading activity as they take supplies from China and supply to their markets in Caplin’s name. This agility helps them adjust to market demand very quickly.
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Caplin will enter US markets through ANDA’s for self and with partners by FY 2019-20. However, they will expand their foot print in Latin American from 7 at present to 12 by 2018. New markets will be namely Brazil, Chile, Ecuador, Costa Rica and Colombia.
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Product expansion: The company plans to ncrease the number of product licenses from 1700 in June 2015 to 2200 in the near future. Even if I assume it to be 2018. We know about the pipeline for future growth. This will be in addition to stable revenue stream to be added via supply of injectables to European and Brazilian market.
6 Margin expansion: The net profit margin of the company is rising from 15% to 18% at present over last few years is likely to improve further.
7 Valuation: Sales are expected to grow at 32% CAGR. Even with current profit margin of 18% the company’s profits are likely to grow at more than 35% CAGR thus leading to EPS of appox Rs 120 by FY 2019-20. At current price of Rs 980 that translates in to forward PE of just 8.16 and trailing 12 months PE of 27.51 vs. market PE of 30.4. This is not giving the decent valuation of even the market PE to the stock price forget about commanding a significant premium due to its abnormal growth vis a vis the industry. To me stock looks extremely cheap and attractive.
Your comments are welcome 
Discl: Invested
Link for the article:
http://www.forbes.com/sites/anuraghunathan/2016/02/24/chennai-pharma-entrepreneur-braved-odds-to-sell-meds-in-latin-america/
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What moat this company over other pharma companies like JB chemicals, Ajanta etc?
Disc: Planning to invest in dips
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