Ipca Laboratories Ltd. share price target

One-off sales of CQ and HCQS to impact growth and margin in FY22E We increase our earnings estimates by 9.7%/7.7% for FY22E/23E while revenue cut by 3.3%/3.1% in FY22E/FY23E. Expansion in EBITDA margins by 170bps to 25.2% (management guidance of 25.0-25.5%) due to reduction in...

Ipca Laboratories (IPCA)'s 4QFY21 performance was below expectations, weighed by moderation in the Domestic Formulation (DF) segment and API sales. However, IPCA remains on track to deliver healthy mid-teen YoY growth in the Branded Generics segment. Increased business share from the integrated manufacturing value chain and better operating leverage in DF would drive improvement in profitability going forward adjusted for onetime business from Hydroxychloroquine Sulfate (HCQS) in FY21. We lower our EPS estimate by 5%/2% for FY22/FY23E, reflecting a) sales growth constraints in the API/Generics segment and b) an increase in...

Domestic formulations comprise 37% of FY21 revenues. The domestic performance has been volatile at times due to presence of anti-malarials in the portfolio. However, with incremental growth in other therapies, especially non-communicable diseases like pain management, cardiodiabetology, etc, the overall portfolio is poised for steady growth. We expect...

IPCA has reported sales of ~INR3.8b (7% of sales) in the Branded export segment over the past 12M (down 5% YoY), largely due to the COVID-led disruption. However, with a reduction in daily new cases in the Middle East / West Africa, the segment is expected to see growth recovery....

IPM is struggling for growth above 10% even after MoM abating COVID concerns and with MRs, physician activities almost reaching pre-COVID level. We believe key reasons for growth below par are (i) subdued new prescription (Rx) leading to volume de-growth (ii) digital marketing yield going south and (iii) sustained lower demand of acute products. Cardiac and anti-diabetic growth takes a breather in Jan-21 at 8.8% and 5.3% after reporting double digit growth in most months during lockdown. While amongst top therapies Gastro and VMN reported double digit growth of 14%...

Ipca Laboratories (IPCA) delivered a marginally better-than-expected 3QFY21 financial performance, led by higher revenues in the Generic/Institutional Anti-Malaria segment as well as improved profitability in its subsidiary (Onyx Scientific) and associate company (Tropic Wellness). Capacity enhancement remains on track for the API business. Opex remains controlled for the Domestic Formulation (DF) segment. We raise our earnings estimate by 4%/2% for FY21/FY22, but lower our estimates by 7% for FY23, factoring in a) recovery in the outlook for Branded...

We reduce our earnings estimate by 3%/6% for FY22/23E, as we trim our growth projection for selective countries in branded and generic export formulation segment. 3QFY21 revenue was in-line with our estimate, however there was an EBITDAM beat of 250bps due to continued lower marketing expense. IPCA reaffirmed its growth guidance for FY22-23E with 1) India...

Strong export tender, API sales; improved margins... Domestic formulations comprise 44% of FY20 revenues. The domestic performance has been volatile at times due to presence of anti-malarials in the portfolio. However, with incremental growth in other therapies, especially non-communicable diseases like pain management, cardiodiabetology, etc, the overall portfolio is poised for steady growth. We expect...

Q2 results were below I-direct estimates on all fronts due to lower-thanexpected sales in domestic formulations. Notwithstanding quarterly gyrations in domestic formulations, the company continues to thrive on the exports front, both in formulations and APIs. Though there are fluctuations in the institutional business, the management remains upbeat on prospects. Going ahead, with firm growth tempo in domestic formulations, good prospects both for API exports, formulation exports, we expect further improvement in financial parameters. Ipca will continue to remain a compelling bet on the back of well-rounded growth prospects for FY2023Esales, EBITDA, PAT CAGR of 12%, 22%, 29%, respectively. We arrive at our...