Hi Krishna,
Thanks for the comments. Caplin Point has polarised opinions on it, and this comment from Donald Sir highlights what seniors thought after visiting the firm. Senior boarders almost never urge people to avoid a company, and if Caplin Point destroys wealth, this warning has been out there for years and I only have myself to blame.
My investment thesis is based on two key things:
- The company in 2021 is different from the 22Cr. bottomline company that Caplin Point was in 2013. I don’t want to reopen the debate that was had around the post that I’ve linked, but Caplin is now much larger, has higher margin products than they did eight years ago, hasn’t had a single regulatory blip, and is entering more traditional markets like the US, Canada, Australia. This means that the context surrounding the concerns has also changed. They are doing things within the pharma space that I’d like to be a part of, such as their Clinical Research wing, Amaris, and Caplin Steriles both of which have interesting people on the board of directors.
- I think this company is becoming more investor friendly over time, and from being headed by a first generation entrepreneur like Mr. Parthibhan to his son who’s Harvard educated, we should continue to see Caplin evolve as time progresses. That’s clearly their goal, and the story has legs until 2023 atleast. In the near future, I’m waiting to see the response that their pre-mixed line and other new ANDAs have, and what market share their products will have in the new geographies.
The key question isn’t to ask if Caplin is the best pharma company in the market right now, but rather whether it’s becoming better or worse over time, and I think it is the former. I don’t know why institutional holdings are low. Currently, only small cap index funds hold Caplin, but there are other companies that they don’t hold like Granules. I’ll write a longer update over the weekend when I have more time, and after listening to their earnings call that I’ve been meaning to.
Would love to hear your thoughts!
Regards,
Chins