Hold Ipca Laboratories;target of Rs 779:Sharekhan
Sharekhan has recommended hold rating on Ipca Laboratories with a target price of Rs 779 in its research report dated November 4, 2015.
November 05, 2015 / 07:45 PM IST
Sharekhan's reserach report on Ipca Laboratories
For Q2FY2016, Ipca Laboratories (Ipca Labs) posted a poor performance due to a ban by the USFDA on three of its India-based facilities and adverse currency movements in the key emerging markets.
During the quarter, the company reported a 3% decline in sales to Rs749 crore, while OPM got squeezed to 11.9% (vs 16.6% in Q2FY2015). In terms of earnings, the company reported a decline of 49.6% YoY to Rs35.6 crore.
The management maintained its revenue guidance of 7% without factoring the US business, while EBIDTA margin should be near 16% for FY2016. We have introduced FY2018E earnings. Also, we have revised our price target to Rs779 (implies 16x average earnings of FY2017E and FY2018E EPS) and maintained our Hold rating on the stock.
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