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S t r o n g s h o w ; I n d o r e S EZ n o d t o w a t c h o u t …
Ipca Laboratories’ Q3FY12 results were a mixed bag. Revenues increased
31.8% YoY to | 614.8 crore above our expectation of | 571 crore mainly
driven by robust 73% growth in export formulations. The institutional
generic business increased to | 92.5 crore from | 22.4 crore in the
corresponding previous period. EBITDA margins rose by 510 bps YoY to
24.6% (our expectation: 23.5%) on the back of a favourable currency and
strong growth in the high margin institutional generic business. The net
profit posted muted growth of | 63.93 crore (our expectation: |83.7 crore)
on the back of forex losses of | 39.9 crore during the quarter. We are
maintaining our BUY rating on the stock.
ƒ Indore facility inspected by USFDA; expects approval in two months
Generic sales from the US grew 45% to | 41.1 crore during the
quarter despite capacity constraints at Silvassa. So far, Ipca has filed
25 ANDAs with the USFDA and received approval for 13. However,
it has launched only eight products in the US market due to capacity
constraints. USFDA has inspected the Indore facility and Ipca
expects approval for the facility in two or three months. Approval for
the facility would also trigger six ANDA approvals in the near term. It
is also in the process of filing for site transfer for other products.
ƒ Lower growth in anti-malarial drags overall domestic growth
The domestic formulation business posted marginal growth of 5.7%
to | 187.6 crore on the back of lower growth in the anti-malarial and
cardiac segment. However, the management has indicated that the
growth will normalise from Q4FY12.
V a l u a t i o n
Once again, the exports business has boosted the overall performance.
With the institutional business maintaining the traction, approval for the
Indore SEZ will be another booster for the company. We expect sales,
EBITDA and PAT to grow at a CAGR of 18%, 25% and 19%, respectively,
during FY11-13E. We have valued the stock at 12x FY13E EPS of | 29.8.
We will upgrade the multiple once the company gets approval and we
can see tangible benefits flowing in. We reiterate our BUY rating
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
S t r o n g s h o w ; I n d o r e S EZ n o d t o w a t c h o u t …
Ipca Laboratories’ Q3FY12 results were a mixed bag. Revenues increased
31.8% YoY to | 614.8 crore above our expectation of | 571 crore mainly
driven by robust 73% growth in export formulations. The institutional
generic business increased to | 92.5 crore from | 22.4 crore in the
corresponding previous period. EBITDA margins rose by 510 bps YoY to
24.6% (our expectation: 23.5%) on the back of a favourable currency and
strong growth in the high margin institutional generic business. The net
profit posted muted growth of | 63.93 crore (our expectation: |83.7 crore)
on the back of forex losses of | 39.9 crore during the quarter. We are
maintaining our BUY rating on the stock.
ƒ Indore facility inspected by USFDA; expects approval in two months
Generic sales from the US grew 45% to | 41.1 crore during the
quarter despite capacity constraints at Silvassa. So far, Ipca has filed
25 ANDAs with the USFDA and received approval for 13. However,
it has launched only eight products in the US market due to capacity
constraints. USFDA has inspected the Indore facility and Ipca
expects approval for the facility in two or three months. Approval for
the facility would also trigger six ANDA approvals in the near term. It
is also in the process of filing for site transfer for other products.
ƒ Lower growth in anti-malarial drags overall domestic growth
The domestic formulation business posted marginal growth of 5.7%
to | 187.6 crore on the back of lower growth in the anti-malarial and
cardiac segment. However, the management has indicated that the
growth will normalise from Q4FY12.
V a l u a t i o n
Once again, the exports business has boosted the overall performance.
With the institutional business maintaining the traction, approval for the
Indore SEZ will be another booster for the company. We expect sales,
EBITDA and PAT to grow at a CAGR of 18%, 25% and 19%, respectively,
during FY11-13E. We have valued the stock at 12x FY13E EPS of | 29.8.
We will upgrade the multiple once the company gets approval and we
can see tangible benefits flowing in. We reiterate our BUY rating
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