Views on IPCA Labs 4QFY2015 Results - Angel Broking

Views of Ms. Sarabjit Kour Nangra (VP Research - Pharma, Angel Broking) on IPCA Labs 4QFY2015 Results:

"The company posted a poor set of numbers, for the quarter. For 4QFY2015, the company posted sales of INR 623cr V/s INR 750cr estimated and INR 744cr in 4QFY2014, a yoy dip of 16.3%. The growth was lead by the domestic market which posted sales of INR 261.6cr, a yoy growth of 12.2%, while exports posted sales of INR 361.1cr, a yoy de-growth of 29.3%.

The exports have been impacted on back of USFDA import alert on 3 manufacturing sites, lower anti-malarial institutions based business and significant currency fluctuations in the emerging markets. This impacted the Gross margins and the OPM.

On the operating front the OPM came in at 4.6% V/s 27.0% during the last corresponding period. This along with an interest expenses and deprecation which rose by 65.4% and 121.8% respectively, lead the company posted Adj. losses of INR 10cr V/s a profit of INR 137cr in 4QFY2014. While our numbers could come in for review post the results, we believe that the company should be able to restore to normal levels in FY2017. Thus we also believe any weakness in the stock on back of the same should be viewed as an investment opportunity for long term. The stock from FY2017 levels can easily provide a 15% return, thus we maintain our BUY rating on the stock."

Shares of IPCA LABORATORIES LTD. was last trading in BSE at Rs.642.15 as compared to the previous close of Rs. 637.65. The total number of shares traded during the day was 12516 in over 675 trades.

The stock hit an intraday high of Rs. 644.15 and intraday low of 635.75. The net turnover during the day was Rs. 8015684.

Source : Equity Bulls

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