Research Report By Motilal Oswal:
International generics to grow fastest; support from India, institutional and API businesses: IPCA expects export formulations to grow at a CAGR of 20%, India formulations to grow at a CAGR of ~15%, institutional business to double to INR8b, and the API segment to witness 10% CAGR over FY14-18. In the US, IPCA’s strategy is to target old, mature products witnessing slow or negative growth. Approval of the Indore plant has eased capacity constraints and is likely to result in strong growth in the US. In India, IPCA aims to grow ahead of industry, with a shift in product mix. Its positioning is the strongest in institutional business, given its backward integration capabilities.
Structural growth story; Buy: We view IPCA as a structural growth story, with all business segments contributing to growth. We expect IPCA to report 30% EPS CAGR over FY14-16, led by international generics. We reiterate Buy, with a target price of INR1,025 (16x FY16E EPS). IPCA is one of our preferred picks in the midcap healthcare space.
Research Report By Microsec:
We rate Ipca Laboratories Ltd. a ‘BUY’. Our rating underpins the company’s strong management, its strategy of focusing on global generic and API business and R&D activities. Company is also focusing on formulation business & therapeutic coverage especially in the fast growing lifestyle related segment.
Ample opportunities to grow in export business: Though in the world pharmaceutical market, India has a share about 3-4% by value, India is recognized as one of the leading global player with a large no. of Drug Master File (DMF) and Active Pharmaceuticals Ingredients (APIs) and formulation with manufacturing facilities approved by regulatory authority of developed countries. Hence, Ipca Lab, which comes among the top 10 pharmaceutical companies in India has ample opportunity to grow its export business which has been already growing by a CAGR of 20% in last 5 years.