Buy Indoco Remedies; target Rs 104: Nirmal Bang

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26 Aug, 2025 12:21

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Nirmal Bang's research report on Indoco Remedies

"Indoco Remedies, we believe that the company has reached a turning point. FY14 is a critical; year for the company as from this point onwards its past investments should start paying returns. We expect sales to grow by 18.2 percent from FY13 to FY15E with higher PAT growth of 50 percent over the same period, on back of handsome returns on Watson product portfolio. First product approval from Watson deal would act as a trigger for the company taking the stock to the next growth trajectory. We expect the company to report improvement in all financial aspects like ROCE/ROE which is likely to have move up from 11.4 percent/13.6 percent in FY10 to 17.7 percent/17.6 percent in FY15E. Debt to Equity ratio is at comfortable level of 0.29x in FY13."

"On valuation front, the stock is trading at a PE of 6.7x on FY15E EPS. We believe the stock is at an inflection point and should be looked from an 18 months view as it’s when the full benefit of the deal would be reflected in numbers. Hence, we recommend a 'BUY' on the stock with target price of Rs 104 (10x on FY15E), a potential of 49 percent in 18 months," says Nirmal Bang research report.

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