Buy Indoco Remedies: target of Rs 525: ICICI Direct

The research firm ICICI Securities believes earnings of apparel brands and retail companies under their coverage may surprise positively from Q3FY22E as the likely demand recovery may result in better than expected margin performance. Some of the costs savings achieved during pandemic may sustain and coupled with high operating leverage may lead to higher than pre-covid margins from Q3FY22E.  Stocks like Trent, V-Mart and Aditya Birla Fashion and Retail are the preferred picks backed by their strong and consistent track record of execution.

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26 Aug, 2025 12:21

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Indoco manufactures and markets branded formulations and APIs for the domestic and export markets. In domestic formulations, through its nine marketing divisions, the company serves a range of specialties. Domestic formulations accounted for 54% of revenues. Major therapies are: respiratory, anti-infectives, stomatologicals, gastrointestinals and vitamins • Formulation exports accounted for 41% (regulated markets:81%) of revenues while APIs contributed 4% with remaining coming from CRAMS.

We maintain BUY on the back of 1) steady domestic business visibility, 2) strong exports guidance and 3) expected improvement in margins. We value Indoco Remedies at Rs 525 i.e. 18x P/E on FY24E EPS of Rs 29.2.