Stock Observation: Caplin Point Laboratories Ltd

Stock Observation: Caplin Point Laboratories Ltd

A company which is in the business of Sterile Injectables and is news in the recent times for various approval it has got for its manufacturing facilities. 

Question is what makes it so special then ?

The Sterile Injectables manufacturing facilities seldom gets the regulatory approvals. We had seen various deals done in the past for such business. Strides arcolabs had sold their Injectables business to Mylan for a sum of 1.6 Billion $. Pfizer and Sun Pharma also had been looking for such buyouts.

Even-though the company is not for sale, the business itself is self sustainable. Their is enough demand for the products and after having a facility approved from various authorities, they will be able to tap newer markets.

Currently EPS is at 27rs, they did a tie-up with Francis Kabi and will be getting various milestone payments from them. Looks like the company wants to expand the business and with Tie-ups and not by selling out.

The above numbers from Screener.in are worth noting and growth is seen in the future too. With a near to zero debt and management saying that they are not looking to raise Equity capital too. The EPS is going to shoot off and the stock will look cheap seeing the global market for Sterile Injectables which is expected to grow at 10% PA going forward till 2020. Clearly a stock for next few years.

The Short term charts for the stock, it has provided a Cup n Handle breakout in the short term and is looking good. It moves higher on a demand of few thousand stocks. As the stock is at new highs and is also not over held by any institution nor any HNI adds advantage to the stock. Promoters hold nearly 67% shares.

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