At a Glance
Accent Microcell is a pharmaceutical excipient manufacturer (aka the stuff that goes with your actual drug). With certifications up the wazoo—EXCiPACT, US-DMF, GMP, HACCP, ISO—they make microcrystalline cellulose for 200+ clients in 10+ sectors. Clean balance sheet, high ROCE, and quietly compounding earnings. But is it still “undervalued”? Or have the capsules already been swallowed?
1. 💊 Business Model: Powder That Powers Pills
- Accent Microcell makes Microcrystalline Cellulose (MCC), a core inactive ingredient used in tablets.
- It exports to global pharma companies and serves industries from food to nutraceuticals.
- They manufacture 22 different grades of MCC. Yes, there are that many types of powder.
- The business has low product complexity but high compliance moat (DMF, ISO, GMP, etc.)
🧠 Edu Angle: It’s like making the rice in a biryani. No one talks about it, but you can’t make the dish without it.
2. 📈 Financials – This Company Lifts, Bro
| Metric | FY21 | FY22 | FY23 | FY24 | FY25 |
|---|---|---|---|---|---|
| Revenue (₹ Cr) | 133 | 166 | 197 | 246 | 265 |
| PAT (₹ Cr) | 5 | 6 | 12 | 30 | 33 |
| OPM (%) | 8% | 8% | 10% | 16% | 16% |
| ROCE (%) | 19% | 27% | 31% | 24% | – |
| ROE (%) | 23% (3Y avg) | – | – | 18% | – |
💰 Profit CAGR (5Y): 51%
💸 Revenue CAGR (5Y): 15%
📦 FY25 EPS: ₹13.78
🎯 Dividend payout: 0% in FY25 (company is reinvesting)
3. 🧾 Recent Events – Right Issue @ ₹135. Why So Generous?
- June 2025: Rights issue of ₹39.77 Cr at ₹135/share (way below CMP of ₹232).
- Offer: 7 shares for every 50 held.
- Purpose: Capex + WC expansion.
📦 They raised cheap equity without needing debt (borrowings down from ₹32 Cr in FY19 to just ₹2 Cr now).
💥 Zero debt, rights issue = smart deleveraging + expansion signal.
4. 📉 Valuation – Still Room for a Pop?
Fair Value Estimate:
Let’s use PE-based valuation with FY25 EPS of ₹13.78
| Scenario | P/E | FV |
|---|---|---|
| Conservative | 15x | ₹207 |
| Median (SME avg) | 18x | ₹248 |
| Bullish (peer smallcap export-focused pharma) | 22x | ₹303 |
🎯 Edu FV Range = ₹207 – ₹303
➡️ CMP of ₹232 sits right in the middle, suggesting neither dirt cheap nor overpriced, especially after 1-year fall of ~15%.
5. 🤺 Peer Comparison – MCC Midget vs Pharma Giants
| Company | ROCE | P/E | OPM | Mcap (₹ Cr) |
|---|---|---|---|---|
| Accent Microcell | 24% | 17x | 16% | ₹556 |
| Divi’s Lab | 20% | 80x | 32% | ₹1.75 L Cr |
| Dr Reddy’s | 23% | 20x | 26% | ₹1.1 L Cr |
| Cipla | 22% | 24x | 26% | ₹1.2 L Cr |
| Torrent Pharma | 27% | 57x | 32% | ₹1.1 L Cr |
🎯 Accent is small, but operating near big-boy metrics in ROCE and margin—even with a boring product.
6. ⚠️ Red Flags – Not Many, But Let’s Nitpick
- 📉 Cash conversion cycle worsened to 124 days in FY25 (from 79 days in FY23). Indicates working capital pressure.
- 📦 Inventory days at 76 and debtor days at 90 = cash tied up.
- 🧍♂️ Promoter holding static at 55.09% – room to raise stake but hasn’t yet.
- 🧾 EPS growth slowing in FY25 (only 7%) – needs another demand spike or pricing bump.
7. 🧠 Final Capsule: Swallow or Skip?
Accent Microcell is a de-risked B2B pharma play with no USFDA anxiety, no patent cliffs, and no leverage. A rare SME where:
- ROCE > 20% ✅
- Profit CAGR > 50% ✅
- Zero Debt ✅
- Reasonable Valuation ✅
It’s not a moonshot, but it’s the kind of business that silently builds wealth. And probably ends up in 90% of tablets across the world.
Tags:
accent microcell, pharma excipients, microcrystalline cellulose, sme stock analysis, nse accentmic, pharma suppliers, eduinvesting stock review
✍️ Written by Prashant | 📅 26 June 2025
