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

💰 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

🎯 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

🎯 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