Caplin Point Laboratories


(Rushikesh Kanthamani) #324

So lets keep this thing in mind so that we can get an answer from them next time when we interact with them.


#325

Pls take the lead and fire a mail to investor relations. It will be great if you can kindly share the outcome on the forum.


(Rushikesh Kanthamani) #326

Yes, already sent a mail yesterday, now waiting for reply, will update here when I here from them.


(Mayankraijain1984) #327

60% growth over last year’s quarter. Also, the ratio between Consolidated/Standalone seems to be increasing, I guess that implies increasing share from US business.

Any views?


(Rushikesh Kanthamani) #328

I dont think so, because business from U.S has not yet been started as far as I am aware of.


#329

H1 Result update:

Financials:
– Consolidated sales up 37% (yoy)
– Consolidated net profit up 57% (yoy)
– Net profit margin decreased to 27% from 29% in previous qtr primarily on account of increase in cost of material consumed and employee cost (both up ~50%)

Other financial highlights:
– Contributions increased on account of entry to new markets which are more profitable albeit longer credit cycle;
– Opex as percentage of revenue decreased by 7% to 21%;
– Company invested ~15cr in fixed assets accrued internally;
– Problem in Angola market due to depressed oil but constitute 5% of sales;

Non-Financial highlights:
– 3 ANDA’s filed; one approved; another getting filed in current qtr;
– 6 ANDA’s planned under Caplin name in next 3 qtrs;
– 40 ANDA’s planned under Caplin name in next 3-4 years;
– Target 7 product filling in Brazil in next 18 months;
– Active registrations ~2450 up from ~2300 (annual report);
– 350 product registrations in pipeline for next 18 months;
– Product approvals received in Chile and Colombia: market entry in next 18 months;
– R&D strength increased to 140: 30% growth yoy;
– Injectable facility for emerging markets going live in the current qtr.

Disc: Vested interest biased views
Source: Company press release and result declarations


#330

Sales for US are atleast an year away, if I am not wrong.

Disc: Vested interest and biased views


(Rushikesh Kanthamani) #331

Yes thats what I have also read…correct
They will be starting from this march


(pla7yer) #332

Despite the healthy results,no price movement in the stock .Any specific reason?


(Rushikesh Kanthamani) #333

I think its because stock is already trading in premium valuations and ppl are looking forward for market correction to happen soon, hence i suppose it will start gadual accent from december end, as both market will support and investors will be looking for opening up of new revenue streams from US markets (march onwards)


(pla7yer) #334

Fair value of caplin is 560 as per Morningstar
I think it’s been in overbought territory for quite sometime now


(manojkol) #335

so we should go by fair value of such agency then what are we doing here


#336

My further interaction with Mr Vivek (COO) and Mr Murlidharan (CFO)

Following are few additional points, I am looking forward to hear from the company:

1: Q2: The sales of the company grew by almost 25% (yoy) but cost of materials consumed almost grew by 50% (yoy). I would like to understand what is the major factor contributing to this substantial increase in costs. Further, i would like to know if this was a one off case or the cost of material consumed has increased permanently.
Ans: Cost of material consumed, cost of sales and change in inventory needs to be looked together where numbers have not changed much.

2: I noticed that in the current set of results includes a dividend of Rs 11 cr from HK subsidiary but as far as i know earnings of HK are already part of consolidated results, so will this recognition of dividend in P&L lead to double counting? Kindly check with the auditors or finance department and remove my doubts.
Ans: That’s the reason dividend of HK was included in standalone numbers and not consolidated numbers.

3: As far as I am aware there are capital control in countries like Venezuela and Colombia. How the company get cash from these markets or the money remain in those countries and used for expansion purpose and only book entry is moved for accounting purposes.
Ans: This is not applicable for Medicines as they are crucial for survival and company has been using the funds for expansion.
Ans: Some problem exist in Angola which is already duly disclosed with results.

4: The company has already stopped operations at Himachal plant and it does not come under the list of facilities of the company. I would like to understand if the company has sold the piece of land and machinery or how they plan to deal with the factory in Himachal.
Ans: Land was on lease so no money from sale of land
Ans: Machinery which could be used is already transferred, rest disposed.

5: I recently got an opportunity to talk to one of the fellow investor, who intern had an opportunity to talk to someone in investor relations most likely Mr Vinod. He was told that the company is supplying medicines and other materials to Brazil. This is in contrast to my interaction with Mr Vivek, where he told that company is yet to get approvals and same was validated in H1 results press release that company is 12-18 months away from supplying products to Brazillian market, but then the message created confusion. Same is the case for Mexico, at present as i am aware there are no operations of the company but the person at investor relations told that the company is supplying to Mexico as well. It would be good if we get to hear same version from all stakeholders of the company.
Ans: No business operations in either Brazil or Mexico

6: If the injectible facility (new plant for rest of the world) gone live and all capex on this plant is already completed.
Ans: The completion of factory is still 6-9 months away

Just got lucky that management of the company is sharing lot of details with me.

Disc: Vested interest and biased views.
Mr Vivek (COO) instead of CEO


(Rushikesh Kanthamani) #337

Thanx, that was a lot of information, nice work


(Growth_without Debt) #338

can you please give contact details of COO & CFO as you already talked to them.


#339

It will not be possible for me to share the contact details as you can understand it is the personal information they wished to share with me and I need to respect their privacy. Kindly write all your queries to investor relations and wait for their answer.

Apologies I can help little in this regard.


(thecroc) #340

I Tried to create a query on screener.in which looks at stocks which are growing fast and have a better ROCE every year.
https://www.screener.in/screens/104640/Most-Efficient-Growing-above-3cr-market-cap/
Caplin Point is showing up as the only result.


(Rohit) #341

http://www.bseindia.com/xml-data/corpfiling/AttachLive/d62cf375-8920-418a-b4a0-1fc1804b22fb.pdf

DEC results declared - Consolidated PAT up 57% , Revenue up 37 %…looks good in first sight.


#342

Consolidated margins went down last qtr with sales of almost 10cr more company has same PBT levels… Also, they are missing the press release till now, which adds value to the results. Maybe they release it later during the day or tomorrow, that what interests me more than the results :slight_smile:


(Mayankraijain1984) #343

Dear all, I came across the attached portfolio for a Smallcap ETF fund by BLACKROCK. They bought ~60K shares of Caplin Point in Dec 2017. ~50K in Dec and +10K post that.

https://www.ishares.com/us/products/239660/ishares-msci-india-smallcap-etf/1467271812596.ajax?fileType=csv&fileName=SMIN_holdings&dataType=fund

Can anyone please help me understand qualitatively, does this reflect that the stock is gradually gaining traction from Institutional investors?

Best regards,
Mayank