IPCA Labs SEZ Indore facility gets USFDA nod - Angel Broking

US Food and Drug Administration (USFDA) following an inspection, has found acceptable the IPCA Labs oral solid dosage formulations manufacturing facility situated at Pharmazone SEZ Indore, Madhya Pradesh. This will enable the company to commercialise oral solid dosage formulations in the US market from this manufacturing facility. Ipca Laboratories in an earlier in November 2012 had during the course of the internal quality assurance review, had noticed a few nonconformances at the said manufacturing unit and had voluntarily referred these to the USFDA. Consequently, the company decided that till the issue is resolved to the satisfaction of the USFDA, no dosage formulations manufactured at this manufacturing unit will be commercialized for the US market.

Management had earlier guided that once the approval is received, the facility would cater to the US generic market and potentially post sales of US$100mn in the next 2-3 years. Management expects the revenue from Indore SEZ to start from 4QFY2014. For FY2014 and FY2015, we have build in a revenues of Rs. 51cr and Rs. 200cr revenues from this facility, and hence upgrade our sales forecast by 1.5% and 6.7% respectively. Consequently the EPS of the company stands upgraded by 1.7% and 7.6% respectively during FY2014 and FY2015 respectively. Since the stock has witnessed a strong up move on back of the same, we retain our neutral stance on the stock with a upgraded target of Rs. 724.

Source : Equity Bulls

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