ICICI Direct has given Buy recommendation for Indoco Remedies with a target price of Rs. 390 in its research report issued on May 26, 2021

ICICI Direct’s research report on Indoco Remedies

Q4FY21 revenues grew 12.2% YoY to Rs 305 crore. Export formulations grew 65.6% YoY to Rs 132 crore driven by strong growth in regulated and emerging markets. Domestic formulations de-grew 13.0% YoY to Rs 139 crore due to continued impact on anti-infective and respiratory segment. API segment remained subdued at Rs 20 crore, down 1.5% YoY. EBITDA margins expanded 569 bps YoY to 17.9% on account of lower staff, travel & promotional spend partly offset by decline in gross margin performance. Subsequent EBITDA grew 64.4% YoY to Rs 55 crore. PAT for the quarter came in at Rs 25 crore (~4.7x YoY) vs. Rs 5.4 crore in Q4FY20.

Outlook

We maintain BUY and arrive at a target price of Rs 390 (earlier Rs 380) based on ~20x FY23E EPS of Rs 19.6.