Ipca Laboratories (IPCA) delivered slightly better-than-expected revenue in 2QFY26, while EBITDA/PAT beat our estimates by 18%/22%. Segmental mix and cost-control measures led to improved profitability in 2Q. IPCA is consistently growing at a higher rate than the industry (IPM) rate in the domestic formulation (DF) segment. Notably, it outperformed IPM in acute and chronic therapies. On promising growth prospects, IPCA would be adding one division in the cosmetic dermatology segment.
OutlookWe value IPCA at 28x 12M forward earnings to arrive at a TP of INR1,600. We expect 10%/15%/20% revenue/EBITDA/PAT CAGR over FY25-28. IPCA is not only progressing well in its focus markets of DF and exports-generics/branded but also working towards building synergy from Unichem operations. Maintain BUY.
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