HSBC maintains buy on Ipca Labs, revises target price to Rs 1,090

HSBC has maintained buy rating on Ipca Laboratories in the long term and revised target price to Rs 1,090 from Rs 1,020. The stock ended down 4.8% at Rs 938.65 on Wednesday while the Sensex closed 189.43 points down at 37,451.84.

Company Financials

For the quarter ended 30-06-2019, the company has reported a consolidated sales of Rs 1078.19 crore, up 23.16 % from last quarter sales of Rs 875.43 crore and up 23.16 % from last year same quarter sales of Rs 875.43 crore. The company has reported net profit after tax of Rs 131.02 crore in latest quarter.


Investment Rationale

In a long-awaited development towards resolution of a pending import alert, the FDA recently inspected Ipca’s Piparia plant, said HSBC. The brokerage said it cannot predict the timing of FDA clearance of its facilities and resumption of US sales, but believes that sustained growth in existing business is sufficient to drive sales and margins growth.