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
28 February, 2015 10:49 IST
`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)*

Comments Post comment 
 Post Comment
Name Email
Comment
Security Code type    into this box
Related Articles
Tata Motors announces initiatives for enhancing competitiveness - 27-Feb-2015 18:45
Karnataka Bank signs MoU with Intech - 27-Feb-2015 17:02
Budget to give special emphasis on renewable energy: Tulsi Tanti - 27-Feb-2015 16:42
RCap receives entire sales proceeds of Rs 6.57 bn from Nippon Life Insurance - 27-Feb-2015 14:43
Nitesh Estates signs new residential project worth Rs 3.75 bn - 27-Feb-2015 13:53
Sadbhav Engineering emerges as successful bidder for NHAI project - 27-Feb-2015 12:04
MoD selects BEL-Rolta consortium as development agency - 27-Feb-2015 11:40
MoD selects BEL-Rolta consortium as development agency - 27-Feb-2015 11:40
Minda Industries enters into JV with Kosei Group - 27-Feb-2015 09:21
85% of enterprises say cloud has lived up to hype: Tata Comm - 26-Feb-2015 12:22
Cabinet approves 15000 MW solar projects by NTPC - 26-Feb-2015 11:15
more...
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