IPCA Labs shares hit fresh 52-week high as Nomura upgrades target price on strong growth plans

Over the past year, shares of IPCA Laboratories surged 70 percent.

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26 Aug, 2025 12:21

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IPCA Labs shares recorded a fresh 52-week high in trade on September 24 after Japanese broking firm Nomura raised its target price on the pharma player.

Nomura bumped up its price target on IPCA Labs to Rs 1,750, seeing a 20 percent upside from the previous close, as  saw growth ahead of the broader market in India. The brokerage also sees scope for its EBITDA margin expansion to drive valuation.

"Our positive view on the stock is based on consistent outperformance in the domestic formulation market. The business attracts higher valuation multiple, and we believe it will contribute ~50 percent of FY26/27F EBITDA," said Nomura.

At 10.20 am, IPCA Labs shares were quoting Rs 1,493, up three percent from the previous session's closing price.

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Nomura added that there is scope for improvement in other business segments in the near to medium term, particularly in generics and API. Additionally, IPCA Labs is set to benefit from the improving cost and revenue synergies at subsidiary Unichem in the near to medium term.

From a long-term perspective, IPCA is making investments in biologics and also intends to revive contract drug development and manufacturing (CDMO) aspirations which were impacted due to USFDA regulatory issues in the past, added the brokerage.

Nomura estimated 30 percent earnings CAGR over FY25-27F and believes the growth momentum may remain strong post-FY27F  as well. The company expects EBITDA margin to reach 25-26 percent overtime compared to Nomura's estimate of 23.6 percent in FY27F.

Over the past year, shares of IPCA Laboratories surged 70 percent in trade as against the benchmark Nifty 50 index, which has risen around 31 percent during the same time.

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