Caplin Point Laboratories

(Rama Kumara Nagaraja) #221

What moat this company over other pharma companies like JB chemicals, Ajanta etc?
Disc: Planning to invest in dips

(Growth_without Debt) #222

With excellent result in past 9 months and expected excellent year end (FY closure June) result for Caplin. But why market is not giving credit to their cash flow, ROCE, ROE? Is there any problem in management or integrity issue? People who staying near the company (Chennai) can give more reliable answer. Please share your thoughts
(Note: I read Caplin Annual Report…All looks excellent,giving all details and adequate transparency but stock price is not moving along with earning growth)

(ishandutta2007) #223

The stock had a huge runup in last 4-5 years from mere 10-15 rupees. In sept 2015 it touched PE of close to 50, it is bound to consolidate at some point of time. Now PE looks reasonable still not very cheap.

(umang_1991) #224

(Deval Khandelwal) #225

Promoters have increased stake to 69.09% from 67.81% in the previous quarter, an increase of 1.28%.

(Mukesh Tolani) #226


A good sign this.


Some issues were raised regarding Corporate Governance at the company. Do we have more information now to judge whether the concerns were justified? A look-back can be a good lesson in investing.

(Growth_without Debt) #228

What were management issues?


I am not a moat investor. The company is dealing in African & South American markets which are too far for small Indian pharmas and too small a size to pull interest from large companies. The company is working to start operations in regulated market through ANDA applications with established players. Story is yet to unfold. A word of caution: The shares of the company has already moved 100x in last 6-7 years.


Company had quality issues in the past leading to higher debt and promoter’s default. It’s a very old story, post that promoter decided not to take any debt and here we are a new business model and polished by simple promoters. One son is in the supply chain and another sitting in the market. So succession planning is also not a issue. Is the price right to enter depends on your risk appetite.

(Rohit) #231

is their any update on the USFDA approval for their plant. That could be a big trigger


It is still some time away, they will fill for ANDA that will trigger the USFDA inspection. They already have approvals from EU and Brazil for this plant. The stock is not trading at premium vis a vis the industry. Infact it is down almost 30-40% from the peak and PE has shrunk from 64 at peak to 29 at present. Caution: It’s highly illiquid take wild swings. Promoters and FII’s are progressively increasing stake in the company, specially Meathew India fund.


Disclaimer: The stock has been a 100x for me, I still hold minuscule quantity. So, every thing I will post on the topic will be laced with vested interest.

(Yogesh Sane) #234

Rohanadvent, you analysis of the advances from customers is good. Did you find anything more about it? This number has perked up since 2012 and that’s also the time it’s sales, profits and stock price has soared. So clearly, this business model has worked if we trust the numbers.
As per your analysis, advances from customers is really not a current liability but an equity and they should have been able to repatriate that to India to either build factories or pay there any evidence of that? I am pretty sure some of these countries where CPL exports have capital controls.

(Mukesh Tolani) #235

Any known reason for Caplin tanking almost 9% today ?

Or is it just volatility at play ?

(Yogesh Sane) #236

Ajanta Pharma reported results today and they said currency volatility and scarcity of forex in select markets as the reason for low sales growth in Asia. I think similar factors will affect CPL as well.
But again, volatility could be the reason as well.


Dr Reddy’s came out with results yesterday with Venezuela market being wiped out. Venezuela is a key market for CPL and their disclosures are bad. This is the overhang for the stock for some time now. Looking forward to stock split and better disclosures.

(Ishank) #238

caplin’s major supplies are to central american countries. Venezuela (south america) is very small makret for it.

(Yogesh Sane) #239

I couldn’t find country-wise break up of their sales. Where did you find the sales for Venezuela? As per their AR, their major sales comes from Latin American countries which include countries from South America as well not just Central America.

(Ishank) #240

From management intercaction.