Live news , top stories, corporate news, company news, sector news, economy news, results analysis news, ceo interviews, fund manager interview, advisor interview, market news, bazaar talk, hot stocks news, ipo news, commodities news, mutual fund news, insurance news, news wire
31 October, 2014 17:32 IST
News
`Buy` Ipca Laboratories; target Rs 420: Emkay
Source: IRIS Exclusive | 01 Feb, 2012, 01.40PM
Comments  |  Post Comment

Emkay Global Financial Services has reiterated `Buy` on Ipca Laboratories with a price target of Rs 420 as against the current market price (CMP) of Rs 299 in its report dated Jan. 31, 2012. The broking house gave the following rationale:

Strong top-line & bottom-line growth due to INR depreciation & institutional business:

> Export formulations (contributed 52%) which grew by 73% to Rs 2.8 billion on back of strong growth in anti-malarial, Generic and Promotional business segments.

> Domestic formulations (contributed 25%) grew at a lower rate of 6% YoY to Rs 1.4 billion in Q3FY12

> Gross and EBITDA margins improved by 235bps and 550bps YoY to 61% and 25% respectively led by INR dep and strong uptake in institutional business

> Adjusted for forex loss of Rs400mn, PAT grew by 88% to Rs 1.04 billion

Future growth drivers:

> Indore SEZ facility was inspected in Jan 2012 without any observations. USFDA approval may trigger 5-6 ANDA approvals. This facility has the peak revenue potential of Rs 4 billion over the next 2-3 years

> Management has guided for 15% growth in the domestic business in Q4FY12 and 13-15% in FY13E. Operating margins are expected to improve once the additional field force becomes productive

>  Operating margins are likely to be in the range of 22-23% in FY13E due to operating leverage from Indore SEZ and domestic business coming back to normalcy.

Valuation:

We expect Ipca to report 22% growth in revenues in FY12E and 18% growth in FY13E. EBIDTA margins are expected to increase from 19.8% in FY11 to 22.5% in FY12E and 21.5% in FY13E. Earnings will grow by 28% CAGR over FY11-13E. Based on strong growth in export formulations, we revise our estimates upwards for FY12 and FY13. Reiterate Buy with a revised target price of Rs 420 (14xFY13E earnings of Rs 30). At CMP, IPCA trades at 11x FY12E and 10x FY13E EPS.

Click here to view full report

Disclaimer: IRIS has taken due care and caution in compilation of data for its web site. Information has been obtained by IRIS from sources which it considers reliable. However, IRIS does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. IRIS especially states that it has no financial liability whatsoever to any user on account of the use of information provided on its website.



Ipca Laboratories Limited   (Q,N,C,F)*


Live News
UTI Mastershare unit scheme declares tax-free dividend - 31-Oct-2014 16:38
Karnataka Bank Q2 profit surges 3 times on higher provisions - 31-Oct-2014 16:30
NIIT, IEEE enter into global alliance to enhance employability of engineers - 31-Oct-2014 16:25
Sensex, Nifty end record closing high - 31-Oct-2014 16:09
US stock futures may open higher - 31-Oct-2014 16:08
Asian stocks settle higher - 31-Oct-2014 15:24
Wipro transforms customer experience at SRL Diagnostics with oracle service cloud - 31-Oct-2014 15:12
Construction spending expected to witness robust growth in near term: ICRA - 31-Oct-2014 14:59
IDBI Bank Q2 profit plunges 38.5% - 31-Oct-2014 14:49
M&M gains post Q2 result - 31-Oct-2014 14:37
MCX Comdex posts weekly rise of 4.58% - 31-Oct-2014 14:30
more...
* Q - Quote , N - News , C - Chart , F - Financials
Comments Post comment 
 Post Comment
Name Email
Comment
Security Code type   4byjgg into this box
Home  |   Shares  |   F&O  |   Mutual Funds  |   Loans  |   Insurance  |   News Centre
Wealth Tracker  |   Newsletters  |   Tax Corner  |   NRI Centre  |   Advertise
© All rights reserved. IRIS Business Services Limited
A Disclaimer