Edelweiss Securities' report on Ipca Laboratories
We interacted with Joint MD of Ipca Laboratories (Ipca), Mr. Ajit Jain. Key highlights: i) Confident of clocking market-beating growth in India as other therapies complement Zerodol. Getting aggressive in cardiac, which can become 25% (from 18%) of the overall pie. ii) Rebuilding UK business through a direct approach, which should improve margin over the next 18 months. iii) Dewas and Ratlam API plants to add 25% to existing capacity. iv) Input cost pressures expected to stabilise in a couple of quarters. v) Targeting API companies with newer molecules, possibly USFDA approved, which can be forward-integrated.
Barring near-term pressures, Ipca is poised to turn in organic low-teens growth as its revenue trajectory is intact. ‘BUY’ with a TP of INR2,530.