Buy Ipca Laboratories; target of Rs 2400: ICICI Direct
ICICI Direct is bullish on Ipca Laboratories has recommended buy rating on the stock with a target price of Rs 2400 in its research report dated August 11, 2020.
August 12, 2020 / 03:29 PM IST
ICICI Direct's research report on Ipca Laboratories
Revenues grew 42.3% YoY to Rs 1534.4 crore (I-direct estimate: Rs 1287.8 crore) due to one-time opportunity of ~Rs 259 crore for HCQS/chloroquine supplies in both API & formulation segments. Export formulations grew 89.4% YoY to Rs 463.6 crore and API segment grew 72.0% YoY to Rs 513.3 crore. Domestic revenues grew 8.1% YoY to Rs 489.4 crore. EBITDA margins improved to 38.3% vs. 18.3% in Q1FY20 (I-direct estimate: 20.0%) due to lower operational expenditure. EBITDA grew 198.4% YoY to Rs 588.3 crore (I-direct estimate: Rs 257.6 crore). PAT grew 244% YoY to Rs 445.9 crore (I-direct estimate: Rs 180 crore) mainly due to a strong operational performance and lower tax rate (18.3% against 22.4% in Q1FY20).
Ipca will continue to remain a compelling bet on the back of well-rounded growth prospects for FY20–22E- sales, EBITDA, PAT CAGR of 14%, 29%, 39%, respectively. We arrive at our target price of Rs 2400 (26x FY22E EPS of Rs 92.3).
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