2026-07-11 11:29:11
Latest Post
Innovision Ltd receives LoA worth Rs. 9.23 crores
Actian Expands Data Management Portfolio with Jaspersoft Embedded Analytics and Reporting
Jayant Infratech Ltd receives order worth Rs. 13.31 crores
Uno Minda announces Greenfield Plant in Chhatrapati Sambhaiinagar with Rs. 320 Crore Investment
Siyaram Recycling Industries Ltd secures order worth Rs. 36.95 lakhs
Research
Ipca laboratories - Deliverance the Key - Karvy
Posted On : 2013-01-05 23:42:27( TIMEZONE : IST )
Recently, we met with the Management of Ipca laboratories (Ipca Labs). With the Management's expressing confidence on scheduled US FDA inspection in Feb'13, scale-up in tender business and outperformance in domestic space, we upgrade our earnings and reiterate our "BUY" recommendation on the stock.
US FDA Issue Relating to Indore SEZ: The US FDA issue relating to the Indore SEZ was people related, as two employees having done wrong documentation, submitted the data without testing. The site continues to be an approved site and the Company has secured approval for Tramadol. The US FDA inspection is due on February 18, 2013. While 3-4 products (>3 years old) are likely to get approval immediately after the inspection, ~4 products - including ARVs - are likely to get nod shortly thereafter. Product launches from Indore SEZ would happen from Jul-Aug'13.
Tender Business: The total tender market size - pegged at US$250-300 mn. The company's business is likely to grow by 15-20% YoY till Jun'14. The business is likely to cross Rs. 3.8-4 bn & Rs. 5 bn in FY13 & FY14, respectively. Ipca is targeting Rs. 8 bn revenues from the tender business by 2016. Increased traction will be on back of increased market share and new product approvals.
Domestic Formulations Set to Outperform: Ipca Labs Q3FY13 will be subdued, as Diwali time is lackluster. Its anti-malarial business has done only 50-60 days this year vis-Ã -vis 4 months previously. The Company has done 16-17% growth so far and should do 17-18 % growth in the domestic formulations in FY13. The key segments which are expected to outperform are: Pain Management & Dermatological (twice the market growth rate), Cough & Cold (1.5x market growth rate) & CVS / CNS (marginally ahead of market growth rate).
Outlook & Valuations
We upgrade our domestic formulations growth to 17% from 16% in FY13E, and to 16% growth rate from 15% revenue growth in FY14E. We also increase the estimated revenue from tender business to Rs 4 bn from Rs 3.8 bn in FY 13E and to Rs. 5 bn from Rs. 4.3 bn in FY14E. We upgrade our earnings by 1.1% to Rs. 32.1 for FY13E & by 5.3% to Rs. 38.5 for FY14E. We upgrade our target price by 13.5 % to Rs. 580 based on 15x FY14E and reiterate our "BUY" recommendation on the stock.
