Prabhudas Lilladher's research report on Indoco Remedies
Indoco Remedies’ (INDR) Q1FY26 EBITDA was largely in line. Though margins and regulated sales have recovered QoQ but they are still below its historical run-rate given elevated expenses and ongoing FDA issues. The warning letter issued for both units has restricted growth, however USFDA has allowed to resume supplies from 2 out of 4 lines. The company cited other expenses to remain elevated in the near term. Our FY26/FY27E EBITDA has been cut by 8- 11% to factor in low margins.
Outlook
At CMP, the stock is trading at 3.9x EV/domestic sales based on FY26E indicating limited downside from current levels. We maintain our ‘Hold’ rating with TP of Rs325 valuing at 15x FY27E EV/EBITDA. Timely resolution of Goa facility Unit 2 is a key for re-rating.
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