Buy Ipca Laboratories, target price Rs 2420: Motilal Oswal

Motilal Oswal has buy call on Ipca Laboratories with a target price of Rs 2420. The current market price of Ipca Laboratories Ltd. is Rs 1989.2.

Ipca Laboratories Ltd., incorporated in the year 1949, is a Mid Cap company (having a market cap of Rs 25078.03 Crore) operating in Pharmaceuticals sector.

Financials
For the quarter ended 31-12-2020, the company reported a Consolidated sales of Rs 1409.83 Crore, up 3.58 % from last quarter Sales of Rs 1361.10 Crore and up 16.24 % from last year same quarter Sales of Rs 1212.86 Crore Company reported net profit after tax of Rs 269.77 Crore in latest quarter.


Investment Rationale
The brokerage values IPCA on a 24x 12M forward earnings basis to arrive at Target Price of INR2,420. It remains positive on IPCA on the back of a) a capacity increase to benefit from robust demand in API, b) a superior performance in DF, c) product launches in its own label in the UK, and d) increased backward integration.

Promoter/FII Holdings
Promoters held 46.3 per cent stake in the company as of Dec 30, 2020, while FIIs held 18.2 per cent, DIIs 24.5 per cent and public and others 11 per cent.