Ipca Labs, Endurance Technologies, ITD Cementation, Suprajit Engineering Q3 Results Review — HDFC Securities

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HDFC Securities Institutional Equities

IPCA Laboratories Strong Q3; India growth, Unichem integration on track

Ipca Laboratories Ltd.'s Ebitda (+35% YoY) growth was driven by 9% YoY sales growth (India grew 13% YoY, branded exports +52%, and API +12%), higher gross margin (+419 bps), and cost controls. Ipca’s guidance is as follows:

1. India is expected to outperform IPM growth by 1.5x, driven by growth in key therapies, market share gains, and new launches;

2. muted growth in Generic exports in FY25 and to recover in FY26; branded generics are to grow at 8-10%, steady growth in Unichem, and 8-10% growth in API;

3. The US scale-up will be driven by new launches, with a focus on profitability improvement;

4. Margins: GM is expected to sustain, and the standalone margin guidance has been raised to 22-23% in FY25 (versus 21% earlier), with consolidated margins at 19-19.5% (vs 18-18.5%) The standalone margin is expected to expand by 100-150 bps over the next few years, driven by chronic scale-up and productivity improvement. Consolidated margins will improve with operational efficiencies in Unichem;

5. Ipca aims to turn net cash in FY26 (vs ~Rs 3-4 billion as of Dec’24). Investment focus includes: Pain management (leveraging the existing network of ortho and dental for additional indications), CVS (adding ~300 MRs), Urology (a fast-growing segment, with Ipca looking to expand its field force), and Derma (to create a presence in the cosmetology segment by adding a new division in H2 FY26).

Endurance Technologies - Decent performance despite of European headwinds

The order book continues to have a good portion of EVs (50%) and the higher margin four-wheeler business (40%). Its long-term plan of expanding the PV share of business to 45% by 2030 from the current 25% will aid its goals of diversification and improving the revenue mix.

The lightweight trend in the automotive industry should further aid the company’s aluminium die-casting business. As it continues to build its capabilities in the BMS space via its subsidiary Maxwell, we expect the order book to expand further, aided by the domestic EV players’ focus on localization, and to procure a better quality BMS.

We value Endurance Technologies at 24x Dec-26 EPS for a target price of Rs 2,179, whilst also maintaining an Add rating.

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