Ipca Laboratories delivered a better-than-expected performance in Q3 FY25. It has consistently outperformed the industry in the domestic formulation market
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Motilal Oswal Report
We raise our earnings estimates by 4%/3%/2% for FY25/FY26/FY27 factoring in:
the increased share of higher-margin products,
better operating leverage for the US business of both Ipca Laboratories Ltd. and Unichem, and
a revival in the South African business.
We value Ipca Labs at 36 times 12 months forward earnings to arrive at our target price of Rs 1,940 on a 12 months forward earnings basis.
Ipca remains on track to:
revive the US business from its own site as well as integrate/scale Unichem operations,
increase offerings/enhance reach/gain market share in the DF segment,
drive improvement in operating leverage.
We model a 28% earnings CAGR over FY25-27. Reiterate Buy.
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