Ipca Laboratories - Result Update - ICICI Securities

Q4FY20 revenues grew 22.1% YoY to Rs. 1074 crore (I-direct estimate: Rs. 1152 crore). Export formulations grew 11.4% YoY to Rs. 282 crore (I-direct estimate: Rs. 362 crore). Domestic revenues grew 21.2% YoY to Rs. 431 crore (I-direct estimate: Rs. 420 crore). API segment grew 30.0% YoY to Rs. 275 crore. EBITDA margins declined 291 bps YoY to 15.7% (I-direct estimate: 21.9%) due to forex loss and higher personnel cost. EBITDA grew 3.0% YoY to Rs. 168.5 crore (I-direct estimate: Rs. 252 crore). Net profit de-grew 12.7% YoY to Rs. 86 crore (I-direct estimate: Rs. 177 crore). Delta vis-à-vis EBITDA was due to higher depreciation and lower other income.

Valuation & Outlook

Ipca has maintained growth tempo in FY20, as was the case for FY19. Besides strong domestic formulations franchise, it continues to thrive on exports front, both in formulations, APIs. Though there are fluctuations in the institutional business, the management remains upbeat on prospects. Going ahead, with firm growth tempo in domestic formulations and good prospects both for API exports and formulation exports, we expect further improvement in financial parameters. The company will continue to remain a compelling bet on the back of well-rounded growth prospects for FY20-22E- sales, EBITDA and PAT CAGR of 13%, 22% and 29%, respectively. We arrive at our target price of Rs. 1900 (24x FY22E EPS of Rs. 79.2).

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_IpcaLabs_Q4FY20.pdf

Shares of IPCA LABORATORIES LTD. was last trading in BSE at Rs.1562.6 as compared to the previous close of Rs. 1593.7. The total number of shares traded during the day was 9491 in over 1964 trades.

The stock hit an intraday high of Rs. 1578.65 and intraday low of 1540.4. The net turnover during the day was Rs. 14773844.

Source : Equity Bulls

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