Buy IPCA Laboratories; target of Rs 990: Motilal Oswal

Motilal Oswal is bullish on IPCA Laboratories recommended buy rating on the stock with a target price of Rs 990 in its research report dated February 16, 2023.

Broker Research

February 17, 2023 / 16:15 IST

26 Aug, 2025 12:21

Volume

Todays L/H

Motilal Oswal's research report on IPCA Laboratories

IPCA delivered a lower-than-expected performance in 3QFY23, with an 11%/ 20% miss on EBITDA/PAT. Sales, however, came in line with estimates. High opex and a slow pick-up in API sales hurt profitability. We cut our FY23/Fy24/FY25 EPS estimates by 20%/14%/14% to factor in 1) a moderation in generics exports, 2) a gradual pick-up in API off-take and subsequent lower operating leverage, 3) an adverse impact of lower pricing for products under NLEM in domestic formulation (DF), and 4) a higher tax outgo. We continue to value IPCA at 24x 12M forward earnings to arrive at a TP of INR990. IPCA continues to deliver industry-beating growth in the DF segment and expects to sustain the momentum via increased MR force and marketing activities. Exports (generics) are expected to pick up as new product registrations/launches are underway. Maintain BUY.

Outlook

We cut our FY23/FY24/FY25 EPS estimates by 20%/14%/14% to factor in 1) a moderation in generics exports, 2) a gradual pick-up in API off-take and subsequent lower operating leverage, and 3) a higher tax outgo. We continue to value IPCA at 24x 12M forward earnings to arrive at a TP of INR990.

For all recommendations report, click here