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Small caps are all the rage, so much so that the SEBI had to publicly express its concerns about the froth accumulating in the small cap universe. The crash on March 13, 2023, didn't dwindle the allure of small caps either. In fact, the BSE SmallCap Index has already recovered, just two weeks following the crash. So, the hunt for the next big small cap is alive and well.
And guess what? We might just have found it. Our experts recently spotted an exciting small pharma company that is quietly making waves. It is also a newcomer in the market and has managed to fly under the radar of fund houses. In fact, no actively managed fund has invested in this small cap. But we think it's only a matter of time before everyone wants a piece of the action. Here's why:
It leads the pack in niche APIs
The company commands market leadership in three niche APIs. To recap, APIs are raw material for pharmaceutical drugs.These products are in high demand, and our selection is at the forefront.
A financial powerhouse
It has backward integration for most of its products, meaning it makes its products from start to finish, commanding higher margins. Over the past five years, its sales and profits have skyrocketed, with earnings growing by an eye-popping 59 per cent annually. And guess what? It doesn't owe a dime to anyone. It is a debt-free company.
Ready for a boom
But the best is yet to come. It has identified exciting opportunities in international markets and rapidly adding capacities to capitalise on it. And we're not just talking growth; we're talking explosive growth. Its sales and earnings before interest, tax, depreciation and amortisation (EBITDA) are expected to surge by 23 and 32 per cent annually, respectively, from FY23 to FY27.
Attractively valued
Currently trading at a 49 per cent discount relative to the BSE Healthcare Index, it presents a unique value proposition.
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This is your chance to get your hands on this growth machine before it becomes the talk of the town. Don't miss out on this opportunity.
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Disclaimer: This content is for information only and should not be considered investment advice or a recommendation.
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