Ipca Laboratories' stock price sank four percent in early trade on May 31 as brokerages slashed their target price on the healthcare player on its largely weak performance for the March quarter.
Ipca Labs reported a 34.5 percent year-on-year gain in revenue at Rs 2,033 crore for the three months ended March as against Rs 1,512 crore during the same quarter in the previous fiscal.
The pharma player's net profit slipped 22.2 percent to Rs 59.6 crore from Rs 76.6 crore in the year-ago period.
At 9.30 am, Ipca Labs stock price was quoting at Rs 1,217.55 on the NSE, lower by 2.55 percent compared to the previous session's close.
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Motilal Oswal cut its earnings estimates by 12 percent/14 percent for FY25/FY26, factoring in: 1) a gradual uptick from the re-launches of ANDAs in the US market, 2) a challenging outlook in the branded generic exports segment, and c) moderation in the growth outlook in acute therapies within the DF segment.
The brokerage arrived at a reduced target price of Rs 1,140 per share but reiterated its neutral call. This implies a downside of around nine percent compared to the previous close.
Nuvama Institutional Equities cut its target price to Rs 1,438, compared to Rs 1,480 earlier. However, the brokerage has a buy rating on the player on the management's optimistic commentary regarding its margin guidance.
The management expects 18 percent margin in FY25E that shall grow to ~21 percent in FY27E. Over six–seven years, IPCA is expecting 24–25% EBITDA margin that can lead to 20–25 percent CAGR in EBITDA.
Over the past year, Ipca Labs shares have jumped 70 percent as compared to a 22 percent rise in the benchmark Nifty 50 index.
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