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
19 September, 2014 23:19 IST
News
`Buy` Ipca Laboratories; target Rs 420: Emkay
Source: IRIS Exclusive (01-FEB-12)
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
RBI to auction 182 days T-Bills on September 24 - 19-Sep-2014 18:52
ING Vysya Bank announces leadership changes - 19-Sep-2014 18:52
Real Estate regulation bill seeks to enhance credibility of sector: Naidu - 19-Sep-2014 18:45
RBI to auction 91 days T-Bills on September 24 - 19-Sep-2014 18:40
FIIs net sellers in equities; DIIs net buyers - 19-Sep-2014 18:30
Govt expects 7% drop in Kharif foodgrains production for 2014-15 - 19-Sep-2014 18:29
Rupee gains 2 paise against dollar to settle at 60.83 - 19-Sep-2014 18:15
ICICIdirect upgrades TTK Prestige to 'Buy' - 19-Sep-2014 18:12
India's Forex reserves fall by $1.61 bn - 19-Sep-2014 17:54
Power Grid board approves Rs 3.32 bn investment, JV with RINL - 19-Sep-2014 17:18
German PPI falls 0.1% in August - 19-Sep-2014 17:18
more...
* Q - Quote , N - News , C - Chart , F - Financials
Comments Post comment 
 Post Comment
Name Email
Comment
Security Code type   x8zw8r into this box
Home  |   Shares  |   F&O  |   Mutual Funds  |   Loans  |   Insurance  |   News Centre
Wealth Tracker  |   Newsletters  |   Tax Corner  |   NRI Centre  |   Forums  |   E-mail  |   Advertise
© All rights reserved. IRIS Business Services Limited
A Disclaimer