From Rs 40 to Rs 500: This multibagger Smallcap pharma stock recorded over 1000 per cent returns in just 3 years! Know its story here
The capsule manufacturing capacity is around 18 BCPA (Billion capsules per annum), which is likely to see a significant rise to 22 BCPA via capital expansion in this fiscal year.
The Smallcap companies are associated with high risk and high reward. Their unlimited upside potential is the prime attraction for the growth investors. Growth, margins and profitability are key components in analysing a Smallcap stock, along with industry analysis. One such Smallcap company, belonging to the pharma domain, which has exhibited strong growth phase along with improvement in financial numbers, is Natural Capsules (BSE Code - 524654). Before turning towards its financials, let us understand what the company profile is.
COMPANY PROFILE
Natural Capsules is a Rs 450 crore pharmaceutical company that specializes in the manufacturing and distribution of empty hard gelatine capsules, pharmaceutical formulations and dietary supplements. The company was founded in 1993 and has since grown to become a leading supplier of empty capsules in India and several other countries. The company's product portfolio includes a wide range of capsules, including transparent capsules, coloured capsules, vegetarian capsules and enteric capsules. The manufacturing units are based in Bangalore and Pondicherry.
KEY TRIGGERS
The company holds strong capex plans and has recently invested in its subsidiary Natural Biogenex having a Rs 115 crore capex. The capsule manufacturing capacity is around 18 BCPA (Billion capsules per annum), which is likely to see a significant rise to 22 BCPA via capital expansion in this fiscal year. Interestingly, the margins are now better, thanks to improved operational efficiency and good exports. The company enjoys a vast customer base which includes big names like Abbott, Pfizer, Glenmark, Aurobindo Pharma and Alkem Laboratories.
FUNDAMENTAL NUMBERS
In its Q3FY23, the company reported net sales at Rs 45.50 crore, which is nearly 21 per cent YoY rise from the corresponding quarter of the previous financial year. Moreover, net profit jumped 28 per cent YoY to Rs 5.25 crore from Rs 4.10 crore in December 2021. The management expects the robust growth phase to continue.
TECHNICAL VIEW
Technically, the stock has witnessed strong buying interest recently, as evident from the spurt in volumes and registered strong consolidation breakout. Since April 2020, the stock has soared over 1000 per cent, from Rs 40 to Rs 500 levels.
CONCLUSION
The stock has been a proven multibagger and holds strong growth potential in upcoming years. With rising fundamental numbers and bullish technical parameters, the stock has attracted HNI and retail participation. Long term growth investors should keep a close watch on this stock for upcoming trading sessions.