Caplin Point Laboratories - Q2FY21 Result Update - ICICI Direct

Q2FY21 revenues grew 18% YoY to Rs. 268 crore. EBITDA margins improved 131 bps YoY to 32.6% due to higher gross margins partially offset by higher staff costs due to recently acquired subsidiaries. Sequential margin improvement (up 279 bps) was on account of a better overall operational performance. Subsequently, EBITDA grew 22.9% YoY, 22.1% QoQ to Rs. 87 crore. However, PAT remained flattish (down 0.7%) YoY at Rs. 57 crore due to lower other income and higher tax outgo.

Valuation & Outlook

Q2 results were above I-direct estimates on all fronts. After scripting a unique story by growing in uncharted territories, Caplin is looking at growth in known markets. These new markets of South America, US are a big opportunity but fraught with new challenges. That said, we continue to believe in Caplin's capability to replicate the success story in new markets. Secondly, despite likely dent in margins, return ratios due to investment phase in new markets, these prints continue to demonstrate earnings, balance sheet strength. By thriving in lesser known CA markets and cracking the most difficult US generic pharma code of injectables, that too in different therapies, Caplin has created its own identity with long drawn plans on the back of significant capex lever. The company continues to offer a compelling risk-reward scenario at current valuations. We maintain BUY rating and arrive at our target price of Rs. 605 (12x FY23E EPS of Rs. 50.3).

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_CaplinPoint_Q2FY21.pdf

Shares of CAPLIN POINT LABORATORIES LTD. was last trading in BSE at Rs.486.05 as compared to the previous close of Rs. 498.3. The total number of shares traded during the day was 23273 in over 1834 trades.

The stock hit an intraday high of Rs. 499.1 and intraday low of 478. The net turnover during the day was Rs. 11399067.

Source : Equity Bulls

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