Ipca Laboratories - Q2FY21 Result Update - ICICI Direct

Q2 revenues grew 6% YoY to Rs. 1361 crore (I-direct estimate: Rs. 1447 crore) mainly due to 21.2% YoY growth in API segment to Rs. 381 crore partly offset by 1.4% YoY de-growth in domestic segment to Rs. 536 crore. Export formulation revenues grew 6.9% YoY to Rs. 364 crore. EBITDA margins improved 586 bps YoY to 26.5% (I-direct estimate: 28.0%) due to higher gross margins, lower other expenditure. Hence, EBITDA grew 36.2% YoY to Rs. 360 crore (I-direct estimate: Rs. 405 crore). PAT grew 38.3% YoY to Rs. 267 crore (I-direct estimate: Rs. 300 crore) in line with operational performance.

Valuation & Outlook

Q2 results were below I-direct estimates on all fronts due to lower-than-expected sales in domestic formulations. Notwithstanding quarterly gyrations in domestic formulations, the company continues to thrive on the exports front, both in formulations and APIs. Though there are fluctuations in the institutional business, the management remains upbeat on prospects. Going ahead, with firm growth tempo in domestic formulations, good prospects both for API exports, formulation exports, we expect further improvement in financial parameters. Ipca will continue to remain a compelling bet on the back of well-rounded growth prospects for FY20-23E- sales, EBITDA, PAT CAGR of 12%, 22%, 29%, respectively. We arrive at our target price of Rs. 2665 (26x FY23E EPS of Rs. 102.5).

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_IpcaLabs_Q2FY21.pdf

Shares of IPCA LABORATORIES LTD. was last trading in BSE at Rs.2094 as compared to the previous close of Rs. 2078.9. The total number of shares traded during the day was 1553 in over 264 trades.

The stock hit an intraday high of Rs. 2099.9 and intraday low of 2080.05. The net turnover during the day was Rs. 3251901.

Source : Equity Bulls

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