Ipca Laboratories sinks to 52-week low after Q3 profit dips

Macquarie has an underperform rating on the stock, with the target at Rs 810 a share

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Ipca Laboratories’ share price dropped to a 52-week low of Rs 818.25 in the morning trade after the pharma company’s consolidated net profit dropped to Rs 107.84 crore in the December quarter, down 45.25 percent from the year-ago period.

At 11.32 am, the share was trading at Rs 823.70, down Rs 39.85, or 4.61 percent, on BSE. It touched an intraday high of Rs 856.95 and an intraday low of Rs 818.25.

Global research firm Macquarie has an “underperform” rating on the stock, with the target at Rs 810 a share.

It believes that Q3 EBITDA and profit missed estimates by 28 percent and 44 percent, respectively.

The company’s revenue from operations rose 8.08 percent to Rs 1,546 crore from the year-ago period.

Total income was at Rs 1,576.89 crore, up by 9 percent from Q3 FY22, while total expenses grew 19.01 percent to Rs 1407.55 crore in Q3 FY23 over Q3 FY22, the company told exchanges on February 14.

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Macquarie expects Q4 FY23 EBITDA margin to remain softer than Q3.

It has lowered FY23 EPS estimates by 25 percent and FY24/25 estimates by 9 percent/7 percent, respectively.

On the other hand, domestic research and broking firm Motilal Oswal has maintained a “buy” call on the stock, with the target at Rs 990 per share.

According to the research firm, IPCA Labs delivered a lower-than-expected performance in Q3 FY23, with an 11 percent miss on EBITDA and a 20 percent miss on PAT.

Sales, however, were in line with estimates.

Motilal Oswal has cut FY23/FY24/FY25 EPS estimates by 20 percent/14 percent/14 percent to factor in a moderation in generics exports, a gradual pick-up in API off-take, an adverse impact of lower pricing for products under NLEM in domestic formulation, and a higher tax outgo.

It continues to value IPCA at 24x 12M forward earnings to arrive at a target of Rs 990.

(With agency inputs)

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