Motilal Oswal Maintains 'Buy' Rating on Ipca Labs, Targets Rs 1820
Ipca Labs Research Report
Summary
Ipca Labs is taking a multi-faceted approach to boost its domestic formulation (DF) segment growth prospects. The company is restructuring its cardiology portfolio, strengthening the Zerodol franchise, focusing on pain management through RA initiatives, and entering the high-end cosmo-dermatology market.
Key Initiatives
Read also: Oshea Herbals Aims for Rs 650 Crore Revenue Amidst Expansion Efforts
- Domestic formulation segment restructuring to drive growth
- Strengthening market share in branded markets
- Gradual ramp-up in generics exports led by US relaunches, EU tenders, and established markets traction
- Unichem integration underway
Outlook
We expect Ipca Labs to deliver a 13% revenue Compound Annual Growth Rate (CAGR) over FY26-28, driven by robust performance in the domestic formulation segment and healthy pick-up in exports.
Financial Projections
- Expected CAGR of 17% in Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) over FY26-28
- Expected CAGR of 16% in Profit After Tax (PAT) over FY26-28
- Better operating leverage to drive EBITDA/PAT growth
Valuation
We value Ipca Labs at 28x 12-month forward earnings, arriving at a Target Price (TP) of INR1,820. We maintain a BUY recommendation.
Investor Takeaway
Investors should consider Ipca Labs for long-term growth prospects.
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