February 21, 2017 / 15:11 IST
IPCA’s Q3 EBITDA at Rs 1.02 bn (up 30% YoY) was in line with our estimate, on account of strong gross margin expansion. However, Q3 PAT was 25% below estimate due to higher tax expense. Domestic formulation witnessed 9% YoY growth, moderately impacted by demonetization.
Outlook
We cut FY17/18/19F EPS by 13%/4%/3% owing to higher tax outgo with revised TP of Rs 580 (18x Dec’18) vs. Rs 600 (18x Dec’18). Maintain BUY given operating leverage play.
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