Ipca Labs an outperformer; target Rs 1415: Karvy

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Karvy Stock Broking has maintained outperformer rating on Ipca Laboratories with a price target of Rs 1415 in its report dated March 10, 2010.

"Ipca Laboratories domestic formulations business (39 % of total revenues) has been one of the key drivers of the company's growth with major chronic segments of the company such as CVS (28 % growth - 9mths), Pain management (30 % growth - 9mths), CNS (27 %growth - 9mths) contributing to the growth. On the domestic API front robust growth of 30 % in current year would be on account of greater procurement of anti-malarial API and higher offtake by Indian manufacturers for US and regulated markets. The company's revenue CAGR for the period FY 09-11 would be to the tune of 22 % while the company's EBDITA margins would have an upward bias with margin expansion from 21 % in FY 09 to 21.9 % in FY 11E. We maintain our Outperformer rating on the stock with a price target of Rs 1,415 based on 13.5x FY2011E(EPS Rs 104.7), "says Karvy Stock Broking.

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