Buy Indoco Remedies; target of Rs 510: ICICI Direct

ICICI Direct's research report on Indoco Remedies

Indoco manufactures and markets branded formulations and APIs for the domestic and export markets. In domestic formulations, through its nine marketing divisions, the company serves a range of specialties. Domestic formulations accounted for 51% of revenues. Major therapies are: respiratory, anti-infectives, stomatologicals, gastrointestinals and vitamins Formulation exports accounted for 40% (regulated markets:81%) of revenues while APIs contributed 8% with remaining coming from CRAMS

Outlook

We retain BUY rating on this stock due to steadiness in domestic business and outlook for inflows from exports amid better operating leverage We value Indoco Remedies at Rs 510 i.e. 18x P/E on FY24E EPS of Rs 28.3