Buy Indoco Remedies; target of Rs 330: ICICI Direct

ICICI Direct's research report on Indoco Remedies

Q1FY21 revenues grew 9.2% YoY to Rs 276 crore with export formulations growing ~60% YoY to Rs 95 crore partly offset by 9% YoY fall in domestic formulations to Rs 147 crore. EBITDA margins expanded 877 bps YoY to 17.6% on account of better gross margin performance and lower travel & promotional expenses. Subsequent EBITDA grew 117.1% YoY to Rs 48.7 crore. PAT for the quarter came in at Rs 17 crore vs. Rs 1.8 crore in Q1FY20.

Outlook

We maintain BUY and arrive at a revised target price of Rs 330 based on ~22x FY22 EPS of Rs 15.

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