Ipca Laboratories: Target Price Raised to Rs 1800 by Prabhudas Lilladher
Ipca Laboratories Research Report
Executive Summary
We have interacted with the management of Ipca Laboratories (IPCA) to assess its medium-term growth trajectory. The company is prioritizing disciplined execution over aggressive diversification, with a focus on strengthening its core businesses and building growth levers.
Business Update
Domestic formulations and branded generics, which now contribute 45% of revenues and 70% of EBITDA, have continued to outperform the market and grow at healthy levels. We expect Ipca Laboratories to deliver revenue growth ex Unichem at 11% over FY26-28E, with normalization in export generic and API business. This will aid operating leverage and improve margins by 200bps over FY26-28E for ex Unichem.
Outlook
At current market price (CMP), the stock is trading at 15x EV/EBITDA and 24x PE on FY28E, adjusted for Unichem stake. We maintain our "Buy" rating on the stock with a target price of Rs1,800/share, valuing the company at 18x EV/EBITDA on FY28E.
Investor Takeaway
Investors should consider maintaining a 'Buy' rating on Ipca Laboratories stock with a target price of Rs1,800/share.
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