Q3FY21 Result Update - Caplin Point Laboratories - ICICI Direct

The Q3FY21 operational performance was mostly in line with our expectations whereas profitability was below due to lower than expected other income. Revenues grew 20.2% YoY to Rs. 274 crore. EBITDA margins improved 89 bps YoY to 30.6% due to higher gross margins, lower other expenses partly offset by higher staff costs likely due to acquired subsidiaries. Hence, EBITDA grew 23.9% YoY to Rs. 84 crore. However, PAT grew 10.1% YoY to Rs. 64 crore due to lower other income & higher tax outgo.

Valuation & Outlook

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 (unchanged) based on 12x FY23E EPS of Rs. 50.6.

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_CaplinPoint_Q3FY21.pdf

Shares of CAPLIN POINT LABORATORIES LTD. was last trading in BSE at Rs.467.35 as compared to the previous close of Rs. 481.85. The total number of shares traded during the day was 30437 in over 2365 trades.

The stock hit an intraday high of Rs. 485.25 and intraday low of 464.8. The net turnover during the day was Rs. 14331068.

Source : Equity Bulls

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