Ipca Laboratories Ltd. share price target

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.

IPCA Laboratories (Ipca)'s results for 4QFY2016 have come in much lower than our expectations on the sales and the operating front, while a tax write-back led the net profit to outperform our estimates. Sales for the quarter de-grew 1.7% yoy to Rs612cr (V/s Rs680cr expected). On the operating front, the gross margin came in at 64.4% V/s 5..

ICICI Securities Ltd | Retail Equity Research Revenues de-grew 0.5% YoY to | 625 crore (I-direct estimate: | 695 crore) mainly due to 25.6% YoY de-growth in API sales to | 114 crore...

the formulations met expectations at Rs 4.98bn. Operating margin at 10.2% (vs estimated 17%)sawsequentialfallfrom16.6%inQ3,resultingin44%our/consensusmissonEBITDA atRs635mn.ThankstotaxreversalofRs190mnthatboostedcorePATtoRs377mn,which...

any volume of Artemisininbased Combination Therapy (ACTs) to IPCA, considering the continuingUSFDAimportbanonIPCA'splants.Wehadbuiltascenarioofnormalcyinthis supply,startingQ1FY17.Withnoorderallocation,IPCAwouldseeadverserevenueimpact...

ICICI Securities Ltd | Retail Equity Research Revenues declined ~11% YoY to | 740.6 crore (I-direct estimate: | 818.8 crore), due to ~22% decline in export formulations to | 305.1...

that focused mainly on the malaria division. Thus, it expects improved operating efficiency from Q4, led by enhanced productivity and better revenue mix in the domesticmarket.SeesimprovingUSsalessupportingprofitability....

For 2QFY2016, IPCA Laboratories (IPCA) posted in line sales while the net profit came in lower than our estimates. The company posted a 4.7% yoy decline in sales to Rs739cr V/s Rs750cr expected, on back of domestic and exports posting a dip of 2.3% yoy and 6.9% yoy, respectively. On the operating front, the EBITDA margin came in at 10.6% V/s 11.4% expected and V/s 16.7% in 2QFY2015, owing to lower than expected sales. Thus, the Adj. net profit came in at Rs31cr V/s Rs41cr expected and V/s Rs68cr in 2QFY2015, a yoy dip of 54.3%. While the current performance of the company is being impacted due to its key plants being under the USFDA scanner, we believe once out of it, the company can bounce back to its normalized ROE of 25%. Thus, we maintain our Buy on the stock. Results lower than expectations: The company, posted an 4.7% de-growth in sales to end the period at Rs739cr V/s Rs750cr expected and Rs775cr in 2QFY2015, on back of domestic and exports posting a dip of 2.3% and 6.9% respectively. In domestic markets (Rs364cr), posted a dip of 2.3% yoy, mainly on back a tepid formulation sales (Rs331cr), a yoy...