Caplin Point Laboratories

Posting the investor ppt here as it hasn’t been discussed since the results.

Slide 6 has details of upcoming capex: maintenance (200cr), Oncology (130cr) and backward integration (100cr). They are planning to manufacture 70% of their APIs inhouse, in an attempt to backward integrate and reduce margin compression in generic generic businesses. Have also mentioned that they are evaluating an inorganic opportunity here which may close by March 2022, so we may hear an announcement soon if this route is taken. On slide 14 they mention that they have already completed R&D for 22 APIs to be used for backward integration in US and Emerging markets.

Also noticed their their R&D spends have gone down to 45cr 9M FY 22 after peaking in FY20 at 85cr. This is interesting, given that they are looking to get into newer areas like oncology, and also file for more ANDAs in regulated markets. So this reduction in R&D spends is very counter-intuitive.

Disclosure: Invested from lower levels and evaluating whether to add more in the present correction.

Full portfolio Vineet Jain portfolio

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Had a quick check with their IR company - he’s still very much invested. Pared it down slightly to less than 1% and their group owns close to 2.1% in total.

Caplin came out with the decent set of numbers for Q4. Below is a summary. Company holding up the gross margins is a big positive and sign of a resilience in the business.

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I could not find any problem yet in their numbers. Seems things are improving. They are progressing well in their operations, but capex has increased a little bit.

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