Ipca Laboratories - Q4FY21 First Cut - ICICI Direct

(CMP: Rs. 2037; MCap: Rs. 25835 crore)

Ipca Laboratories' Q4FY21 results were below I-direct estimates on all fronts with the company witnessing double digit sequential sales decline across segments (excluding Export Branded Generics segment).

Q4FY21 Earnings Summary

- Revenues remained subdued growing just 3.8% YoY to Rs. 1115 crore (I-direct estimate: Rs. 1271 crore). Strong YoY growth of 19.7% in export formulations to Rs. 338 crore (I-direct estimate: Rs. 379 crore) was partly offset by API sales decline of 5.5% YoY to Rs. 260 crore (I-direct estimate: Rs. 325 crore). Domestic formulations also moderated overall growth, remaining flat at Rs. 434 crore (I-direct estimate: Rs. 474 crore) vs. Rs. 431 crore in Q4FY20

- EBITDA margins improved 484 bps YoY to 20.5% (I-direct estimates of 22.5%) due to better gross margins and lower other expenditure. Subsequently, EBITDA grew 35.8% YoY to Rs. 229 crore (I-direct estimate: Rs. 286 crore). Delta vis-à-vis I-direct estimates was mainly due to lower than expected top-line performance and higher than expected increase in other expenditure

- PAT grew 87.5% YoY to Rs. 161 crore (I-direct estimate: Rs. 204 crore). Delta vis-à-vis EBITDA was due to higher other income, lower depreciation and tax rate

Quarterly performance gyrations notwithstanding, the company remains a decent player with judicious mix of strong domestic franchise and a spread out exports model with healthy balance sheet. Going ahead, with firm growth tempo in domestic formulations, good prospects both for API exports, formulation exports, we expect further improvement in financial parameters.

We would be revisiting our estimates and coming out with a detailed update post the conference call.

Shares of IPCA LABORATORIES LTD. was last trading in BSE at Rs.2071.1 as compared to the previous close of Rs. 2024.25. The total number of shares traded during the day was 19429 in over 2079 trades.

The stock hit an intraday high of Rs. 2084.4 and intraday low of 2021.7. The net turnover during the day was Rs. 39934405.

Source : Equity Bulls

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