Caplin Point rallies 12%, hits 52-week high on strong Q1 results

Shares of Caplin Point Laboratories hit a 52-week high of Rs 1,000, as they rallied 12 per cent on the BSE in Tuesday’s intra-day trade in an otherwise subdued market after the company reported strong operational performance for the June quarter (Q1FY24). The stock of pharmaceutical formulation company surpassed its previous high of Rs 991.50 touched on August 7, 2023. In comparison, the S&P BSE Sensex was down 0.23 per cent at 65,802 at 11:42 AM.

In Q1FY24, the company’s earnings before interest, taxes, depreciation, and amortization (EBITDA) grew 24 per cent year-on-year (YoY) to Rs 127 crore, margins expanded 250 bps to 32 per cent. The company’s revenue rose 14 per cent YoY to Rs 395 crore from Rs 346 crore in Q1FY23. Profit after tax jumped 20.8 per cent to Rs 104 crore from Rs 86.31 crore in a year ago quarter.

The company recorded robust growth in its Latin America business, both in terms of revenue and profitability which also resulted in robust margins. The expansion of Softgel capacity at CP-1 site has strengthened the company’s position in this market, with a quick payback, the management said.

With a healthy order book, company targets 40-50 per cent growth in revenues in FY24. Increase in revenues targeted through new product launches and higher market share from current products.

Caplin’s core business which is focused on Latin America and Francophone Africa is expected to grow at above industry average pace with margins expected to improve with increased branded generics business.

Meanwhile, Caplin plans to enter more regulated markets such as Canada, Australia, China, Russia/CIS as well as enter the bigger LATAM markets of Mexico and Brazil in the near to medium term horizon.

Caplin has allocated a Capex budget of approximately Rs 500-550 crore for the investment projects. The intended Capex aims to enhance existing production capacities, widen the product range, and achieve backward integration for a majority of the products. The Capex will be financed solely through internal accruals, and the company will remain net cash positive throughout the process, the company said.