Buy Indoco Remedies; target of Rs 365: Firstcall Research

Firstcall Research's report on Indoco Remedies

"Indoco Remedies has reported a 53% growth in Profit After Tax (PAT) during third quarter of FY15 at Rs. 216.2 mn compared to Rs. 141.2 mn in the corresponding quarter last year. Net revenues during the quarter grew by 15.26% to Rs. 2166.6 mn as against Rs. 1878.1 mn for the same period last year. For the third quarter, EBIDTA margin to net sales is at 20.1% at Rs. 428.9 mn as against 15.8% at Rs. 299.6 mn during the same quarter last year. The Company’s domestic formulation business has introduced three new products taking the tally of new products launched to 17, till Dec’14. International business revenues grew by 22.9% at Rs. 832.8 mn as against Rs. 677.4 mn for same quarter last year. In the regulated markets, contribution of Europe is 35.9%, followed by US at 31.7%. During the quarter, the revenues of API business grew by 15.3% at Rs. 129.0 mn as against Rs. 112.0 mn during the same period last year."

"Company’s domestic business continues to focus on brand building, new product launches, concentrated efforts to increase share in chronic segment and penetration in Tier II and Tier III towns, especially in Northern and Eastern Region. Indoco’s international business continues to focus on its core competencies, viz., R&D and Manufacturing. Going forward, the US and EU business is expected to grow speedily as ANDAs and Dossiers will be commercialized at regular interval. Expertise in R&D, excellence in Manufacturing and strong customer base will drive Indoco’s Domestic as well as International business in the coming years. Thus we recommend ‘BUY’ on the stock with a target price of Rs 365 for medium to long term investment", says Firstcall Research Report.

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