Add Ipca Laboratories, target price Rs 893: Choice Equity Broking

Choice Equity Broking has add call on Ipca Laboratories with a target price of Rs 893. The current market price of Ipca Laboratories is Rs 831.2.

Ipca Laboratories, incorporated in the year 1949, is a Mid Cap company (having a market cap of Rs 20917.91 Crore) operating in Pharmaceuticals sector.

Ipca Laboratories key Products/Revenue Segments include Pharmaceuticals, Other Operating Revenue, Export Incentives, Sale of services for the year ending 31-Mar-2022.


Financials
For the quarter ended 31-12-2022, the company has reported a Consolidated Total Income of Rs 1576.69 Crore, down -3.69 % from last quarter Total Income of Rs 1637.18 Crore and up 9.23 % from last year same quarter Total Income of Rs 1443.40 Crore. Company has reported net profit after tax of Rs 115.61 Crore in latest quarter.

The company’s top management includes Mr.Premchand Godha, Mr.Ajit Kumar Jain, Mr.Pranay Godha, Mr.Prashant Godha, Mr.Anand T Kusre, Mr.Dev Parkash Yadava, Dr.(Mrs.)Manisha Premnath, Mr.Kamal Kishore Seth. Company has G M Kapadia & Co as its auditors. As on 31-12-2022, the company has a total of 25 Crore shares outstanding.

Investment Rationale
The brokerage factors in double-digit top-line growth in the coming years; export business in the recovery phase wherein the API business is expected to improve; normalization in the raw material cost and other operating expenses to improve the margin; and lastly the company will continue to beat market growth in the domestic formulation segment.

Choice Broking values the stock based on Sep-24E EPS to arrive at a target price of Rs 893 (valuing at 25x) and improve its rating from neutral to Add on the stock.

Promoter/FII Holdings
Promoters held 46.29 per cent stake in the company as of 31-Dec-2022, while FIIs owned 10.46 per cent, DIIs 33.71 per cent.