IndiaNivesh has issued an ‘Initiating Coverage’ report on Indoco Remedies claiming that the Company can deliver 46% CAGR earnings over FY14-17E and that there is huge upside from the stock
We initiate coverage on Indoco Remedies (INDR IN) with BUY rating as we believe that company is poised for superior growth going forward. Based on its agreement with Watson Pharmaceuticals (Bloomberg code: ACT US Equity), own filing in US market, start of its own registration in European market and continuous effort to shift from acute to chronic segment in domestic formulation (DF), we believe that Indoco Remedies could deliver 46% CAGR in earnings over FY14-17E. We value Indoco Remedies at 20x (20% discount to large cap companies and in-line with midcap peers) FY17E EPS of Rs19.6 to arrive at price target of Rs392, implying potential upside of 32% from current levels.
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