Indoco Remedies  Q3 Results Review  — Regulated Market Performance Remains Subdued; Systematix Retains 'Hold'

NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

Systematix Research Report

Indoco Remedies Ltd.’s Q3 FY25 revenue came higher than our expectations, while margins and net earnings were moderately lower than our estimates. Revenues were lower on a YoY (~10.6%) & QoQ (~5.1%) basis due to underperformance in the regulated market sales, led by ongoing remediation efforts post U.S. Food and Drug Administration warning letter for its Goa Plant II, and refurbishment of existing plants under master manufacturing plan, affecting US, Europe and Emerging Markets sales.

Margins were lower due to higher-than-expected other expenses and employee cost margin. US sales were lower 41% YoY. Domestic branded formulation sales growth was 16.5% YoY and above expectations. Emerging markets reported de-growth during the quarter (~36% YoY). Exports to South Africa, New Zealand and Australia declined 54% YoY.

Given that negative operating leverage and elevated interest expense have adversely impacted net profit and the remediation efforts are still underway, we revise our valuation approach from P/E to EV/ Ebitda. We maintain a Hold rating on Indoco with a target price of 325 based on 13X FY27 EV/Ebitda.

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.