IndiaNivesh Securities has downgraded Indoco Remedies (INDR) to 'Hold' from 'Buy' with target price of Rs 392 in its report.

Commenting on the investment rationale, the stock broker said, "Indoco Remedies' financial performance was below our estimates, led by lower-than-expected sales growth in exports and higher-than-expected other expenses. The overall performance was driven by strong growth in domestic formulation (DF) segment.

We maintain our sales and adjusted PAT estimates for FY16 and FY17 as outlook remains intact. We expect earnings in FY16E and FY17E to be driven by increased business, under Watson agreement in US, own dossier  filing in Europe and better-than-industry growth in domestic formulation market.

At CMP of Rs 367, the stock is trading at 22.4x FY16E EPS of Rs16.4 and 18.8xFY17E EPS of Rs19.5. We continue to value INDR at 20x FY17E earnings to arrive at price target of Rs 392. However, we downgrade INDR to Hold rating on the basis of limited upside from current levels."

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