Caplin Point Laboratories Multibagger Turns Rs 10,000 into Rs 2.7 Lakh in 10 Years: Should You Invest?

Caplin Point Laboratories, a company that develops and markets generic drugs, has seen its stock price soar by 2,767% over the last 10 years. This means that an investment of Rs 10,000 a decade ago would now be worth Rs 2.7 lakh, according to ET Markets.

Recent Performance

Despite its impressive long-term performance, the stock’s recent growth has slowed. Over the past six months, it has increased by just 6% and is up about 12% for the year.

Company Overview

Caplin Point Laboratories produces and markets a variety of generic and branded products, including tablets, syrups, capsules, injectables, and ointments. The company has research and development facilities in Tamil Nadu and a manufacturing facility in Puducherry. It operates in markets such as Latin America, Southern Africa, Francophone Africa, the US, and Europe.

Ownership

As of the latest data, the company’s promoters own 70.62% of the shares, while public shareholders own 29.38%. Among public shareholders, mutual funds hold just over 1%, and foreign investors own about 3.13%.

Recent Financials

In the March 2024 quarter, Caplin Point Laboratories reported a standalone revenue of Rs 139 crore, down from Rs 144 crore in the same quarter last year. However, its consolidated profit after tax (PAT) increased to Rs 86.91 crore, up from Rs 70.77 crore in the previous year.

Technical Analysis

According to Mileen Vasudeo, a senior technical analyst at Arihant Capital, the stock recently broke out from a period of sideways movement, with strong trading volumes on the daily chart. The Relative Strength Index (RSI), a momentum indicator, is also showing positive signs. Vasudeo suggests that the stock is likely to continue its upward trend and recommends buying with a stop loss at Rs 1370. The potential upside targets range from Rs 1800 to Rs 2000.

Caplin Point Laboratories has delivered impressive returns over the past decade, but its recent performance has been more modest. With strong technical indicators and a solid financial position, it may still offer good investment potential.