Shares of IPCA Laboratories jumped more than 4 percent on February 16 morning with positive on the stock after the company's in-line Q3FY24 earnings.
IPCA Labs reported a 66.8 percent on-year rise in consolidated net profit at Rs 179.88 crore in the December quarter. Its revenue came in at Rs 2,052.86 crore, up 32 percent YoY.
According to Motilal Oswal, IPCA Labs remains on track to deliver better-than-industry growth in the domestic formulation segment. Its rebuilding the US business from its site, given successful compliance in place. "However, the branded generics segment would need enhanced efforts to improve growth prospects," it said.
According to analysts JM Financial Services, IPCA’s US business is at an inflection point – regulatory issues at its facilities have been resolved, supplies are expected to start from Q1FY25 and Unichem is outperforming street expectations.
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US turnaround, strong domestic franchise and exports growth led the brokerage to give a "buy" call on the stock with a target price of 1,280 a share.
Motilal Oswal, however, cut earnings estimate for FY24-26 to factor in prolonged subdued outlook in the API segment, lower off-take in the branded generics segment, and reduced operating leverage.
"The current valuation adequately factors the upside in earnings," it said, reiterating its "neutral" stance on the stock with a target price of Rs 1,080.
HSBC maintains its "hold" recommendation with a target price of Rs 1,125 a share. Though the company's branded markets faced challenges, there's optimism for recovery, it said.
The outlook for PICA's India business remains positive and growth in export markets is expected to continue despite potential short-term volatility, the brokerage said. Supply to export markets and input cost trends are key things to watch in the near term, it added.
Also Read | IPCA Labs Q3 net profit up 67% at Rs 180 crore
At 10.44 am, IPCA Labs shares were trading 4 percent higher at Rs 1,206.45 on NSE. The stock has rallied 40 percent in the last one year, outperforming benchmark Nifty which has risen 22 percent during this period.
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