Outperform Ipca Laboratories, target Rs 920: IDFC Securities

IDFC Securities has an outperform call on Ipca Laboratories with a target price of Rs 920.

The current market price of Ipca Laboratories is Rs 681.70.

Time period given by the brokerage is 24 months when Ipca Laboratories price can reach the defined target.


"Ipca Laboratories Limited (Ipca) has been in the midst of a perfect earnings storm over FY14-17, with simultaneous headwinds across multiple business segments. We believe the worst is over for Ipca as: 1) Domestic formulations and branded formulation exports are normalizing and 2) Global Fund institutional malaria sales will resume from Q1FY19. Further, potential resolution of FDA issues by H2FY19 can drive meaningful growth to Ipca’s US generics and API exports FY20 onwards and add to Ipca’s medium-term revenue growth momentum. Ipca has leveraged the crisis to rationalize costs and accentuate operating leverage through revenue recovery. We estimate 16 per cent revenue, 30 per cent EBITDA and 37 per cent PAT CAGR over FY18-21E. We reiterate our Outperformer rating on Ipca with a 24-month target price of Rs 920 (18x FY21E EPS)," IDFC Securities said in a report.