Buy Caplin For A target Price Of Rs. 1010

Indices are down for the second consecutive day after a winning run Post Budget 2022. At the time of writing this copy at around 2:41 pm, Nifty was down below 17,500, while Nifty small cap 100 further underperformed the headline index with loss to the tune of over 0.7%.

So, as brokerages based on their analysis give 'Buy', 'Hold' or 'Sell' calls, here is small cap stocks given a 'Buy' by ICICI Direct. The stock has been recommended for gains in 1 year to the tune of 25%.

Q3FY22 Results:

Caplin continued on its growth trajectory in core geographies while US witnessed relatively slower offtake in sales. Sales were up 18.9% YoY to Rs. 326.2 crore EBITDA was at Rs.101 crore, up 20.3% YoY with margins at 31.3%. Adjusted PAT has been at Rs. 75 crore.

Brokerage’s take on the stock:

ICICI Direct continues with its 'Buy' rating on the stock given the steady growth from legacy LatAm markets, visible pipeline in US and significant capex to expand capacity, widen portfolio and backward integrate. The stock has been valued at Rs. 1010 i.e. 20x P/E on FY24E EPS of | 50.5

What shall drive the company’s future performance?

The company has its own niche area by rendering services in the less famous CA markets and finding the US generic pharma code of injectables.

Further the company development pipeline remains robust for the US, with 45+ ANDAs under development with addressable market in US ~ US$4.2 billion Also, Caplin is forming domestic market sales team focused on niche hospital injectable Alternate Stock Idea.

About Caplin:

Caplin Point Laboratories Ltd is engaged in the manufacture of a wide range of Ointments, Creams and other External application formulations in addition to the regular segments of pharmaceutical formulations.The company has also made an entry into the Bio-tech market and manufactures a wide range of bio-tech products.

The company as of now generates its entire revenue from exports with 92% revenues from emerging markets Caplin Steriles caters to the rapidly growing demand for injectable products in US and other Regulated Markets.

Disclaimer:

The stock market is volatile and the above stock is taken from the report of ICICI Direct and is not an investment advice.

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