NSE Code: CAPPL.NS
BSE Code: 524742
Caplin Point was established in 1990 to manufacture a range of ointments, creams and other external applications.
The Company was listed in 1994 following its IPO which was oversubscribed 117 times, the proceeds of which were deployed in setting up a manufacturing facility at Pondicherry. Thereafter, the Company expanded its product range and increased its production capacity.
The Company focused on the emerging markets of Latin America, Caribbean, Francophone and Southern Africa and is today one of the leading suppliers of Pharmaceuticals in these regions, with over 2000 product licenses across the globe.
The Company is entering into the Regulated Markets for Injectables through its state of the art manufacturing plant, capable of handling Liquid Injectables in Vials,Ampoules, Lyophilized Vials and Ophthalmic dosages. The facility is approved by US FDA, EU-GMP, ANVISA-Brazil and INVIMA-Colombia.
Consistent 33% Compounded Growth in Sales & Profits, this is really Awesome and it proves the Credibility of their Research & Sales capacity.
Innovative Products clocking around 500 and contributes to New products developments, Developments NSAIDs , Anti-Depressants, Anti-emetic, Anti- Coagulants, etc
Technological Improvements, R&D enhancement, QC support in analytical methods, Proper Adherence to Regulator requirements, Data Mining in Retail should enhance Increased Sales & Profit Efficiency.
Almost Zero Debt company, Less Interest paid, thus More Safer Investment. Higher Capital Employed usage in 2017 is a remarkable factor.
Increase in Promoter Holdings, Shows good Sign of Confidence in Company & Future. Additionally, the high amount of Promoter Holding supports Increase in Price during good times.
Expansion into New Markets including Latin America, GDP growth in World, 17% Pharmaceuticals Market Growth in China ensures the 33%Growth will be Real in next 5 Years.
High Growth, OP, NP, ROE valuation parameters.
Traded at Discount currently, which is another Boon of Market Crash. I see the Downside risk is limited.
Caplin Point 2.0
As per the Caplin Point 2.0 Strategy, the company is expanding into US Market, South American Market and Investing in 10X educational academy. Over the years, the Company invested its resources in the CP4 unit dedicated to the manufacture of injectables for the regulated US market. The Company invested ~H350 crore in opex and capex through accruals to enter the US market, which could strengthen the Company’s sectoral respect and Competitiveness. During the last decade, the Company increased its Latin American footprint from two countries to 10 countries.
Caplin Point invested in its business with the objective of strengthening its prospective products pipeline. The Company filed 2 ANDAs in its name. The Company commenced commercial deliveries to the US market through partners. It was required to provide credit to new customers. It made commercial entries into Chile, Paraguay, Panama and Costa Rica. The company launched products in niche segments (soft gels, suppositories and branded/OTC range), strengthening revenues.
High in Book Value Ratio, which is usually a Curse of the High Growth companies.
Already a Multibagger of Past.
Generic Drug, Technology competition from Peers pose threat on revenue & PAT.
Currency Fluctuation risk.
Geographical Risk due to Excess exposure to Latin America regions.
P&L shows progress in Income & Profit
Balance Sheet shows displays Capital Employed increased 59%, Net Worth increased 62%.
Cash Flow Statement shows free Operating cash flow.
Warren Buffett Checklist
|History of Consistently Increasing Sales, Earnings & Cash Flow||Yes|
|Durable Competitive Advantage||Yes|
|Future Growth Drivers||Moderate.|
|Conservative Debt (long term debt < 3 Net Profit)||Yes|
|Debt Equity Ratio, Current Ratio||DER is Zero, Current Ratio is High.|
|Return on Equity must be Above Average||Yes|
|Low CAPEX required to maintain current operations||Moderate|
|Management is holding / buying the stock||Yes|
|Price is Under Valued (< intrinsic value)||Yes
As per the Futurecaps Intrinsic Value Calculator the company is at a discount of 50%.
|Stock Price is consolidating (now)||Yes|
|Stock Price is growing in past years along with EPS growth||Yes|
Additional Futurecaps Checklist
|Consolidated PE, PB Ratio||PB is high|
|Cash Flow Positive, Net Profit % greater than 8%||Yes|
|Paying Dividends, Tax||Yes|
|EPS Growth Rate||Good|
|Jump in Trailing Result EPS||Yes|
|Jump in Quarterly Result EPS||Yes|
|Expected Gain in 5 Years||5X|
|Price Movement Graph, 52 Week High & Low||Yes|
|Power of Brand||Yes.
(the company have heavy brand reputation)
|Corporate Governance, Reputation of Leaders||Promoters selling holdings is an Issue in Past.|
|Fraud reported||Not in current search|
Based on the Value & Growth parameters, the company hold Multibagger properties.
Note Free Multibaggers will not be tracked & Hence no follow-ups will be provided.
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