Buy Ipca Labs; target of Rs 417: Firstcall Research

Firstcall Research is bullish on Ipca Laboratories and has recommended buy rating on the stock with a target of Rs 417 in its July 10, 2012 research report.

“IPCA is a fully-integrated Indian pharmaceutical company manufacturing over 350 formulations and 80 APIs for various therapeutic segments. The company was incorporated in 1949.For more than 60 years, Ipca has been partnering healthcare globally in over 110 countries and in markets as diverse as Africa, Asia, Australia, Europe and the US. This is one of the world's largest manufacturers and suppliers of over a dozen APIs. These are produced right from the basic stage at manufacturing facilities endorsed by the world's most discerning drug regulatory authorities like US-FDA, UK-MHRA, EDQM-Europe, WHO-Geneva and many more. Ipca is a therapy leader in India for anti-malarials with a market-share of over 34% with a fast expanding presence in the international market as well. The company also leads in DMARDs (Disease Modifying Anti-Rheumatic Drugs) treatment for rheumatoid arthritis. The Company has leading brands in 5 therapeutic areas, with 4 of its branded formulations being ranked among the Top-300 Indian brands by ORG-IMS. The company has 9815 employees. Its exports for the FY2011-12 are Rs.1401.97Crs.”

“IPCA LABORATORIES LTD disclosed a phenomenon rise in standalone net profit for the quarter ended March 2012. During the quarter, the profit of the company surged 30.80% to Rs 766.10 million from Rs 585.70 million in the same quarter previous year. Net sales for the quarter rose 17.28% to Rs 5611.40 million from Rs.4784.70 million, when compared with the prior year period. It reported earnings of Rs 6.07 a share during the quarter, registering 30.33% increase over previous year period.”

“At the current market price of Rs.374.10, the stock is trading at 14.03 x FY13E and 12.60 x FY14E respectively. Earning per share (EPS) of the company for the earnings for FY13E and FY14E is seen at Rs.26.67 and Rs.29.68 respectively. Net Sales and PAT of the company are expected to grow at a CAGR of 15% and 12% over 2011 to 2014E respectively. On the basis of EV/EBITDA, the stock trades at 8.24 x for FY13E and 7.33 x for FY14E. Price to Book Value of the stock is expected to be at 2.95 x and 2.39 x respectively for FY13E and FY14E. We expect that the company will keep its growth story in the coming quarters also. We recommend ‘BUY’ in this particular scrip with a target price of Rs 417 for medium to long term investment,” says Firstcall Research report.   

Institutional holding more than 40% in Indian cos

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