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Brokerages see 16% upside in Ipca Labs despite fall in Q2 profit, margin headwinds

The drug firm reported a 6.30 percent fall in its consolidated net profit to Rs 250.23 crore for the second quarter ended September 30.

November 17, 2021 / 11:06 AM IST
 
 
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The Ipca Laboratories share is in focus after the company reported a decline in profit for the September quarter.

Drug firm Ipca Laboratories on November 13 reported a 6.30 percent fall in its consolidated net profit to Rs 250.23 crore for the second quarter ended September 30.

The company had posted a net profit of Rs 267.07 crore for the corresponding period of the previous fiscal, Ipca Laboratories said in a regulatory filing. Consolidated revenue from operations stood at Rs 1,544.43 crore for the quarter under consideration.

The stock was trading at Rs 2,120.40, down Rs 34.45, or 1.60 percent, at 10:39am on November 17. It has touched an intraday high of Rs 2,144.90 and an intraday low of Rs 2,102.

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Jefferies has a ‘buy’ call on the stock with target at Rs 2,477 per share, an upside of over 16 percent from the current market price. It is of the view that its Q2 revenue was in line but EBITDA/profit of 8 percent/15 percent was below estimates. The domestic business is strong and the outlook remains upbeat, it said.

“COVID disruption and high distributor inventory are impacting Europe generics sales. New regulations for Sartans will lead to a loss of EU Sartan API sales in Q3,” it said.

Morgan Stanley, on the other hand, has an ‘equal-weight’ call on the stock with target at Rs 2,203 per share. “The company is facing near-term margin headwinds and below trendline sales growth. Resolution of FDA issues also appears uncertain. These factors together with valuation drive our equal-weight on the stock,” the brokerage said.

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Moneycontrol News
first published: Nov 17, 2021 11:06 am

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