Key highlights: Sales at Rs 8.42bn (+11% yoy) were 8% above our expectations, which was led by smart 22% yoy growth in formulation export. Both domestic formulations as well as APIs export were up by +9% yoy. Operating margin at 15.3% (+470bps yoy) was almost in line of our expectation 16.1%, resulting in 2% beat in EBITDA at Rs 1.28bn. However, forex loss of Rs 81mn and higher tax incidence of 34% (vs. normalised tax rate of 21%) dragged the reported PAT to Rs 476mn (+127% yoy). Now management guides for higher tax of ~25% for FY17. So, adjusting the forex loss and factoring guided taxes, the Adj PAT was 3% below our expectation of Rs 669mn.Phillip Capital pre?fixed target price of Rs 475 discounts FY18 estimates by 14x and don’t expect any immediate re?rating for IPCA. Hence, maintain NEUTRAL rating with TP of Rs 475.