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Hem Securities
Caplin Point (Accumulate)
Target: ₹896
CMP: ₹831.55
Total Revenue stood at ₹312.02 crore for Q2-FY22, registering a growth of 15.6 per cent over Q2-FY21. PAT increased by 22.3 per cent to ₹76.82 crore in Q2-FY22. Gross margins improved by 345 bps to 58.6 per cent in Q2-FY22 and free cash flow stood at ₹103 crore for H1-FY22.
Company has received approval from Brazil’s ANVISA for injectable plant through mutual recognition of the USFDA EIR. CRO wing Amaris Clinical has completed back-to-back virtual and physical USFDA audits, both with NIL observation. The company has focussed to achieve a cash balance of ₹1,000-1,500 crore in the next five years. Management is expecting to achieve $100 million sales from Caplin Steriles by FY26.
The company drives its revenue majorly from Latin America which account for 87 per cent of revenue. The US and Africa contribute 9 per cent and 4 per cent to topline respectively. The company locally manufactures 65 per cent to the product while balance 35 per cent products are manufactured in China.
The company is expected to show handsome growth in new territories led by portfolio expansion, backward integration and strong balance sheet.
We expect company to deliver topline growth of 20 per cent over next few years. We recommend to Accumulate on the stock with price target of ₹896.
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