Q3FY21 Result Update - Ipca Laboratories - ICICI Direct

Q3FY21 revenues grew 16.2% YoY to Rs. 1410 crore (I-direct estimate: Rs. 1374 crore) mainly due to strong YoY growth of 22.0% in export formulation to Rs. 431 crore. API sales also posted robust growth of 23.4% YoY to Rs. 352 crore. Domestic formulations grew 7.7% to Rs. 523 crore. EBITDA margins improved 346 bps YoY to 26.0% (I-direct estimate of 26.1%) due to lower employee and other expenditure partially offset by lower gross margins. Subsequently, EBITDA grew 34.1% YoY to Rs. 367 crore (I-direct estimate: Rs. 358 crore). PAT grew 34.3% YoY to Rs. 266 crore (I-direct estimate: Rs. 262 crore) in line with operational performance.

Valuation & Outlook

Q3 results were in line with I-direct estimates on all fronts (albeit skewed) led by strong growth in export institutional, API sales. In addition to decent growth in domestic formulations, Ipca 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%, 24%, 28%, respectively. We maintain BUY and arrive at our target price of Rs. 2490 (earlier TP: Rs. 2665) based on 25x FY23E EPS of Rs. 99.5.

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_IpcaLabs_Q3FY21.pdf

Shares of IPCA LABORATORIES LTD. was last trading in BSE at Rs.1936.1 as compared to the previous close of Rs. 2000.65. The total number of shares traded during the day was 13169 in over 1347 trades.

The stock hit an intraday high of Rs. 2038 and intraday low of 1907. The net turnover during the day was Rs. 25901078.

Source : Equity Bulls

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