Dolat Capital recommended accumulate rating on IPCA Laboratories with a target price of Rs 1600 in its research report dated June 17, 2020.
Dolat Capital's research report on IPCA Laboratories
Vinati Organics Q4FY20 sales were below our estimates to Rs 2.45bn (D.est: Rs 2.75bn), sales de-grew by 17.3% YoY and were up 2.9% sequentially. The de-growth in sales YoY is largely attributed to de-growth in ATBS and IBB volumes. Gross margins improved by 442bps YoY and 509bps QoQ on account of benign RM costs. EBITDA/PAT degrew by 15.1/9.6% YoY to Rs 1.0bn/Rs 746mn respectively. Employee costs were up 21.9% YoY to Rs159 mn, a higher other income up by 57.8% YoY to Rs 162mn and a lower tax rate of 31% against 33% in 4QFY19 shielded PAT to Rs 746mn.
We continue to be positive on the stock, however due to prevailing rich valuations we maintain accumulate rating with a target price of Rs 1,066/share.
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