Motilal Oswal has given Buy recommendation for Ipca Laboratories recommended buy rating on the stock with a target price of Rs 2480 in its research with a target price of Rs. 2480 in its research report issued on Apr 11, 2021
Motilal Oswal’s research report on Ipca Laboratories
While doctors have resumed their clinics, partly on account of having received their vaccinations, patient footfall is yet to return to normal levels. Particularly, patient footfall remains low in the case of Pediatrics. IPCA has witnessed sustained growth momentum in the Pain segment. It has posted market share gains, on account of the pandemic, in products wherein smaller companies have been unable to meet supply requirements. Moreover, higher prescriptions for established brands such as Zerodol have enhanced growth prospects for IPCA in this segment. IPCA has outperformed in the Anti- Neoplastics, Central Nervous System (CNS), Dermatology, and Urology segments as well. IPCA has been a small player in Anti-Infective therapy – growth prospects have been impacted even further due to COVID. IPCA is gradually reviving sales in this therapy via new launches and increased traction in existing products. Overall, we expect a 14.5% sales CAGR in DF to INR27b (37% of sales) over FY21–23.
We value IPCA on a 24x 12M forward earnings basis to arrive at Target Price of INR2,480. Reiterate Buy.