Nirmal Bang Remains Structurally Positive On Indoco Remedies; Maintains 'Hold' Rating — Check Target Price

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Nirmal Bang Report

Indoco Remedies Ltd.’s revenue is expected to clock 12.6% CAGR over FY25-FY27E, mainly on the back of growth in the DM export formulations business and new launches in the domestic market, along with growth in EMs.

We are building in 54% CC CAGR over FY25-FY27E for the US market on the back of a low base. The domestic formulations business is expected to clock 10% CAGR over FY25-FY27E to Rs 10.1 billion mainly on account of increased focus on new launches and the chronic segment. Ebitda margin is expected to be ~16%.

Net profit is expected to reach Rs 951 million by FY27-end. The company is currently trading at 24x/10.8x EV/Ebitda on FY26E/FY27E. Return on equity/return on capital employed will remain decent at 10%/8.5% by FY27E.

We like Indoco Remedies due to the high contribution from the domestic market and the robust complex products portfolio for the US market. The company anticipates full commissioning of its master manufacturing plant in H2 FY26, which should further enhance operational efficiency. We value the company on an EV/Ebitda basis, as it is less affected by differences in capital structure, non-cash charges, and varying tax regimes, making it a more consistent metric for peer comparison.

Applying an 11x EV/Ebitda multiple on our Jun-27 estimates, we arrive at a target price of Rs 310 and maintain our Hold rating.

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