Buy Ipca Laboratories; target of Rs 837: Prabhudas Lilladher

Prabhudas Lilladher’s research report on Ipca Laboratories

Institutional, non-US generics warm up for better stride: With 17% YoY growth in India formulations (despite Q4 being a seasonally weak quarter for IPCA) and 44 YoY growth in institutional tender business, IPCA’s revenue growth of 17% YoY along with 55% and 16% YoY growth in adj. EBITDA and PAT shows signs of improved performance and this momentum is expected to continue in FY19E-20E.

Outlook

We expect the key fundamentals to improve gradually and set-off for bigger momentum once FDA issues resolve. IPCA trades at PER of 26.8x (FY19E) and 18.8x (FY20E). We maintain ‘Buy’ and retain TP at Rs837.

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First Published on Jun 8, 2018 04:32 pm