Ipca Laboratories Ltd. share price target

IPCA Labs posted results lower than expected for 3QFY2017 on both sales and net profit fronts, however OPM's were in-line with expectations. In sales, the company posted sales of Rs731cr, a yoy growth of 8.3% v/s Rs815cr expected. On EBITDA front, the company posted EBITDA of 13.9% (v/s 13.5% expected) v/s 11.6% in 3QFY2016. Consequently,..

IPCA's Q3 EBITDA at Rs 1.02 bn (up 30% YoY) was in line with our estimate, on account of strong gross margin expansion. However, Q3 PAT was 25% below estimate due to higher tax expense. Domestic formulation witnessed 9% YoY growth, moderately impacted by demonetization. Export businesses growth wa..

Revenue fell by 14.31% to Rs. 730.84 Cr in Q3FY17 when compared to the previous quarter. On the other hand, it increased by 8.35% when compared with Q3FY16.

ICICI Securities Ltd | Retail Equity Research Revenues grew 8% YoY to | 751 crore (I-direct estimate: | 783 crore) mainly due to 9% growth in domestic formulations to | 335 crore (Idirect estimate: | 355 crore). Export formulations grew 6% YoY to | 234 crore (I-direct estimate: | 257 crore) EBITDA margins improved 182 bps YoY to 14.7% (I-direct estimate: 13.7%) on account of a strong gross margin performance. Gross margins increased 357 bps YoY to 66.2% (I-direct estimate: 62.0%) Net profit grew 66% YoY to | 45 crore (I-direct estimate: | 44 crore)...

In Q3FY17, total revenues of IPCA Labs increased by 8.6%YoY to Rs 7,418mn (our estimates Rs 7598 mn) mainly due to increase in domestic formulations. The Companys operating margins increased by 181 bps YoY to 14.7% (higher than our estimates 14.6%) during the quarter mainly due to higher gross margins and lower staff and overheads. Its net profit has increased by 57% YoY to Rs 413 mn in Q3FY17 higher than our estimates of Rs 326 mn.

Ipca Laboratories posted numbers lower than expected on the net profit and OPM front. On sales front, the company posted sales of Rs853cr (vs. Rs750cr expected vs. Rs739cr in 2QFY2016), posting a yoy growth of 15.5%. On the operating front, the EBITDA margin came in at 12.8% vs. 14.9% expected vs. 10.6% in 2QFY2016. Consequently, the...

ICICI Securities Ltd | Retail Equity Research Revenues grew 17% YoY to | 885 crore (I-direct estimate: | 840 crore) mainly due to 23% growth in domestic formulations to | 404 crore (I-direct estimate: | 395 crore). Export formulations grew 16% to | 264 crore (I-direct estimate: | 235 crore) EBITDA margins improved 331 bps YoY to 14.5%, (I-direct estimate: 16.6%) on account of lower other expenditure. EBITDA grew 52% to | 128 crore (I-direct estimate: | 140 crore)...

In Q2FY17, total revenues of IPCA Labs increased by 15%YoY to Rs 8,529mn (our estimates Rs 8621 mn) mainly due to increase in domestic formulations. The Companys operating margins increased by 342 bps YoY to 14.7% (lower than our estimates 17.2%) during the quarter mainly due lower gross margins, higher staff cost and overheads. Its net profit has increased by 519% YoY to Rs 557 mn in Q2FY17 but lower than our estimates of Rs 739 mn.

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.

Revenues grew 11.1% YoY to | 842 crore (I-direct estimate: | 813 crore) mainly due to ~22% YoY growth in export formulations to | 274.8 crore (I-direct estimate: | 253 crore). Domestic formulations grew 8.5% to | 345 crore (I-direct estimate: | 334 crore).EBITDA margins increased 442 bps YoY to 15.3%, (I-direct estimate: 13.1%) on account of an improvement in gross margins and lower other expenditure. EBITDA grew 56.4% to | 129 crore. Adjusted net profit grew 95% YoY to | 53 crore (I-direct estimate: | 52 crore) due to incremental EBITDA and lower depreciation. ICICI Securities Limited have ascribed a target price of | 605 (20x FY18E EPS of | 30.2). They upgrade to BUY as the stock has corrected ~40% from its peak.