Prabhudas Lilladher's research report on Ipca Laboratories
Ipca Labs (IPCA) reported EBITDA of Rs4.2bn (up 10% YoY) was marginally below our estimates led by miss in Unichem nos. Q1 profitability for Unichem was weak with 4.3% OPM; impacted by certain one offs and price erosion in certain products. Mgmt. reiterated its FY26 guidance of 9-10% revenue growth however 75bps margin expansion vs 100 bps earlier. Our FY26E and FY27E EPS remain unchanged. API and generic business growth were muted in FY25; recovery will be gradual. Domestic formulation business, which now contributes 40% of revenues and ~55% of EBITDA, continued to outperform and grow at healthy levels. At CMP, the stock is trading at 16.5x EV/EBITDA and 27x PE on FY27E adjusted for Unichem stake.
Outlook
We maintain our ACCUMULATE with TP of Rs1,525/share; valuing at 18x EV/EBITDA.
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