Reviews

CAPLIN POINT LAB 

In this edition, we have reviewed Caplin Point Lab and Dwarikesh Sugar. We suggest our reader-investors to HOLD in Caplin Point Lab and Dwarikesh Sugar.

CAPLIN POINT LAB
BSE CODE 524742
HOLD Reco. Price Rs636
Change 35 Per Cent
CMP - Rs410
Face Value Rs2

We had recommended Caplin Point Lab in volume 33, issue no. 2 dated December 25, 2017-January 7, 2018, under the ‘Cover Story' section when the scrip was trading at Rs.636. Our recommendation was based on the robust financial performance of the company and expansion in more profitable business.

Caplin Point Laboratories is engaged in the manufacture of a wide range of ointments, creams and other external application preparations, in addition to the regular segments of pharmaceutical formulations.The company has also entered into the bio-tech market and manufactures a range of bio-tech products.

On the financial front, the net sales of the company increased by 14.75 per cent to Rs.110.44 crore in Q4FY18 as against Rs.96.24 crore in Q4FY17. The PBDT of the company increased by 7.76 per cent to Rs.37.89 crore in Q4FY18 as against Rs.35.16 crore in Q4FY17. The net profit of the company declined marginally by 1.46 per cent to Rs.21.58 crore in Q4FY18 as compared to Rs.21.90 crore in Q4FY17.

On an annual basis, the company posted 202.68 per cent increase in its net sales to Rs.426.57 crore in FY18 as against Rs.347.72 crore in FY17. The PBDT of the company increased by 54.72 per cent to Rs.165.04 crore in FY18 as against Rs.106.67 crore in FY17. The net profit of the company increased by 44.38 per cent to Rs.102.31 crore in FY18 as against Rs.70.86 crore in FY17.

After our recommendation, the share price of Caplin Point Lab has declined by about 52 per cent. At the current stock price and financial performance, the stock is available at attractive valuation. Hence, we recommend our reader-investors to accumulate 20 per cent of their holdings and HOLD the stock.

DWARIKESH SUGAR

BSE CODE 532610
HOLD Reco. PriceRs76.50
Change 78 Per Cent
Face ValueRs1 CMP -Rs16.60
Face ValueRs1

We had recommended Dwarikesh Sugar Industries in volume 32, issue no. 24 dated October 30-November 12, 2017, under the ‘Low Priced Scrip' section of the magazine when the scrip was trading at Rs.76.5. Our recommendation was based on the company's robust financial performance and favourable sector outlook.

Dwarikesh Sugar is engaged in the production of sugar and other sugarrelated activities. The product range of the company includes sugar, white crystal sugar, ethanol, captive power, molasses and valuable residue.

On the financial front, the net sales of the company decreased 24.85 per cent to Rs.349.36 crore in Q4FY18, as against Rs.464.89 crore in Q4FY17. The company reported a negative PBDT of Rs.14.75 crore in Q4FY18 as against the positive PBDT of Rs.107.92 crore in Q4FY17. The company reported a net loss of Rs.9.21 crore in Q4FY18 as compared to net profit Rs.46.82 crore in Q4FY17.

On an annual basis, the company posted 16.1 per cent increase in its net sales to Rs.1468.28 crore in FY18 as against Rs.1256.1 crore in FY17. The PBDT of the company decreased by 44.38 per cent to Rs.134.66 crore in FY18 as against Rs.242.09 crore in FY17. The net profit of the company decreased by 35.98 per cent to Rs.101.45 crore in FY18 as against Rs.158.47 crore in FY17.

After our recommendation, the share price of Dwarikesh Sugar Industries declined significantly. Over the last 3 to 4 years, sugar stocks have been outperformers. However, in the past six months, the situation has changed for the worse due to supply glut that took its toll on the stock prices of sugar companies. We recommend our reader-investors to HOLD the stock till Rs.30 level .

(Closing price as on July 03, 2018).