Buy Ipca Laboratories; target of Rs 1765: Sharekhan

Sharekhan's research report on Ipca Laboratories

Quarterly revenues reached Rs. 2,355 crore, marking a 16% y-o-y increase and a 13% rise from the previous quarter. Profit after tax (PAT) came in strong at Rs. 245 crore, up 39% as compared to last year and 23%, sequentially. EBITDA stood at Rs. 441 crore, reflecting a 22% y-o-y growth and a 12% increase sequentially. Margins stood at 19%, improving by 102 bps y-o-y but slightly declining by 2 bps versus the previous quarter. Market share rose to 2.14% from 2.04% in Q2FY25, with six of its brands now featured in the top-300 brand list.

Outlook

Integration of Bayshore’s generics business into Unichem US would boost growth, aided by recovering international revenue and recent US regulatory approvals that expand production. Strategic investments in biologics and CDMO initiatives add further growth potential, with the stock showing upside at current multiples of 40x and 30x for FY26E and FY27E EPS.