Prabhudas Lilladher's research report on Indoco Remedies
We cut our FY24/FY25 EPS by ~11% factoring in lower margins. Indoco Remedies’ (INDR) Q4FY23 revenues (Rs4.3bn) were in-line, while EBITDA was sharply below our estimates by ~20% led by forex loss and higher other expenses. Adjusted for forex loss, margins came in at 15.2% (down 300 bps QoQ), but then it will improve as and how revenues further scale up. We remain structurally positive on INDR’s growth prospects given 1) MR productivity enhancement along with high penetration in North & East markets 2) new launches in US and 3) higher tender business in EU market.
Outlook
We expect 20% PAT CAGR over FY23-25E. At CMP, stock is trading at 15x FY25E EPS. We retain our ‘Buy’ rating with TP of Rs400; 18x FY25E EPS.
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