Midcap Pharma Stock To Buy For 22% Potential Upside, Board Recommends 100% Dividend

ICICI Direct in its recent equity report on Caplin Point Laboratories Ltd. initiates a Buy call with an attractive target price of Rs. 900/share. With the assigned target price, the stock is likely to give a decent return of up to 22% if purchased at the current market price. This is a Midcap pharmaceuticals sector stock with a market capitalisation of Rs. 5,591.16 crore.

The Stock in its recent Board meeting held on May 27, 2023, recommended a dividend of Rs. 2/share of face value of Rs. 2 each i.e. 100% for the financial year 2022-23.

Recommended Interim Dividend

According to regulatory filing by the Board of Directors of Caplin Point Laboratories Ltd., "the Declared an Interim Dividend of INR. 2 (100 %) per equity share of face value of INR. 2 each for the financial year ended March 31, 2023. Fixed June 9, 2023 as Record Date for determining the eligibility of the Shareholders for the purpose of Interim Dividend."

Q4FY23 Results

According to ICICI Direct, In line numbers, substantial beat on margins front. Revenues grew 14.8% YoY to Rs. 389 crore. EBITDA grew 24% YoY to Rs. 123.9 crore and margins improved 238 bps YoY to 31.8%. Adjusted PAT grew 28% YoY to Rs. 101.1 crore.

Buy stock for a target price of Rs. 900/share

According to ICICI Direct, Caplin's share price has grown at 31% CAGR over the past three years. Maintain BUY due to 1) Consistent growth from legacy LatAm markets and increasing footprints in other geographies, 2) Traction from visible order book in the US and 3) Calculated capex decisions to expand capacity, widen portfolio and backward integration. Valued at Rs. 900 i.e. 18x P/E on FY25E EPS of Rs. 50.1.

Stock Outlook

The stock is currently trading at Rs. 740.80 apiece, up 0.51% from the previous close of Rs. 736.35 apiece. Its 52 week high is Rs. 856.80 apiece recorded on 2 August 2022 and 52-week low is Rs. 575 apiece recorded on 29 March 2023.

It jumped 5.44% in the last 1 week, and 10.53% in 1 month, respectively. It has given 2.33% positive return in 1 year. In 3 years, the stock gave 134.13% positive return. In 5 years, it has given 39.51% positive return.

About - Caplin Point Laboratories Ltd.

Caplin derives almost entire revenues through exports with 86% of revenues from Emerging Markets (LatAm + RoW) where it has an end-to-end business model through last mile logistical solutions for its exclusive distributors. In the US, overall development pipeline remains robust, with 55+ ANDAs under development with an addressable market in US at over US$5 billion. For LatAm markets, it outsources ~45% of products (China: 35%; Indian vendors: 65%) and in-house manufacturing remains at ~55%. Caplin Steriles caters to the rapidly growing demand for injectable products in the US and other regulated markets.

Disclaimer - The stock has been picked from the brokerage report of ICICI Direct. Greynium Information Technologies, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.