Sharekhan has given Buy recommendation for Ipca Laboratories with a target price of Rs. 2675 in its research report issued on Nov 24, 2021
Sharekhan’s research report on Ipca Laboratories
IPCA Laboratories’ (Ipca) board has approved acquisition of 26.57% stake in Lyka Labs for a consideration of Rs 97.89 crore and have also approved entering a joint management control agreement with the promoters of Lyka Labs, thus triggering an open offer. The acquisition is astrategic positive for IPCA as it provides entry into lucrative lyophilized injectables business in India and ROW markets, which bodes well as IPCA does not have a presence in this space now. Strong position across chronic and acute therapies and a robust demand environment are key growth drivers for the domestic formulations segment.However muted performance of the API business and rising cost pressures could be near term challenges, though long term growth levers are intact.
Outlook
We retain Buy recommendation on the stock with unchanged PT of Rs 2,675.