Ipca Laboratories Seen as Attractive Investment Opportunity

Ipca Laboratories Delivers In-Line Revenue in 4QFY28

Ipca Laboratories, a leading pharmaceutical company, has reported its financial results for the fourth quarter of fiscal year 2028 (4QFY28). According to the company's latest research report by Motilal Oswal, IPCA delivered revenue in line with expectations during this quarter. However, the company managed to beat its earnings before interest, taxes, depreciation, and amortization (EBITDA) estimates by 5%, driven primarily by a significant increase in gross margin.

The revenue growth of IPCA Laboratories over the past year was largely driven by its domestic formulation (DF) and exports segments, specifically in the generics and branded categories. This positive trend was partly offset by subdued sales in the active pharmaceutical ingredients (API) and institutional anti-malaria segments. Notably, IPCA has been consistently outperforming its peer, Ipca Medical Products (IPM), in the DF segment for four consecutive years. The company's focus on core brands and limited new launches is expected to help sustain its growth momentum in the future.

The company has also shown significant improvement in its export sales, particularly in the generics segment. The US sales, which had been sluggish in the recent past, are gradually showing signs of recovery, while other export markets for generics are experiencing healthy growth. As a result, IPCA delivered better year-over-year (YoY) growth in generics exports for fiscal year 2026 (FY26). Additionally, the branded export segment has seen an uptrend in YoY growth for the third consecutive year in FY26.

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Estimates and Valuation

Motilal Oswal's research report maintains its estimates for IPCA Laboratories for fiscal years 2027 and 2028 (FY27/FY28). The company values IPCA at 28 times its 12-month forward earnings, resulting in a target price (TP) of INR1,730.