Buy Caplin Point Laboratories; target of Rs 895: ICICI Direct

ICICI Direct's research report on Caplin Point Laboratories

Caplin derives entire revenues through exports with 90% 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, Caplin has filed 21 ANDAs on its own and through partners, 18 approvals from the USFDA (five with partners) • For LatAm markets, it outsources ~40% of products from China, ~20% from Indian vendors and in-house manufacturing of the remaining ~40% • Caplin Steriles caters to the rapidly growing demand for injectable products in US and other regulated markets.

Outlook

Maintain BUY due to 1) steady growth from legacy LatAm markets, 2) traction from US injectable, 3) calculated capex decisions to expand capacity, widen portfolio and backward integration. Valued at Rs 895 i.e. 18x P/E on FY24E EPS of Rs 49.6.

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