Buy Indoco Remedies; target of Rs 430: Prabhudas Lilladher

Prabhudas Lilladher's research report on Indoco Remedies

Indoco Remedies’ (INDR) reported robust performance in a regulated market; management expects to maintain its growth momentum given strong order book and new launches. Domestic market performed well on low base in therapies like anti-infective, Cardiac and Respiratory along with higher prescriptions. We remain structurally positive on INDR on account of 1) MR productivity enhancement and higher penetration in North and East markets 2) new launches in US and 3) higher tender business in EU market. Our FY23E and FY24E EPS stands reduced by 9% and 6% as we factor in lower margins.

Outlook

Given recent correction in stock price and current valuations of 14.8x P/E on FY24E are attractive, we upgrade stock to ‘Buy’ from Accumulate with TP of Rs430 based on 18x FY24E earnings.