PINC Research has maintained hold rating on Ipca Laboratories with a target price of Rs 262 in its October 12, 2011 research report.
“Ipca Laboratories’ domestic business has been under pressure on back of intense price competition, internal restructuring and attrition of field force. The company’s key therapeutic segments namely Anti-malaria, Anti-infective and CNS have witnessed de-growth in the last few months. As a result, we now estimate Ipca’s highmargin domestic formulation business to grow below industry average over FY11-13E as compared to out-performance seen in the last couple of years.”
“Ipca’s export growth going ahead would be dependent on Indore SEZ approval by USFDA which has been pending for the last 30 months. Although we have factored in the approval for Q4FY12, any further delay would hamper the growth. Further AMFm, which contributed ~10% to sales in Q1FY12, could rationalize co-payments to manufacturers going ahead.”
“We value the stock at 12x one year forward earnings which is at a discount of 45% to large peers given the scale and the business-mix (high exposure to low-margin API segment and highly competitive domestic formulation acute therapeutic segment). We initiate coverage on the stock with a ‘HOLD’ rating and Target Price of Rs 262. We believe any re-rating from here on would be driven by pick-up in the domestic formulation business,” says PINC Research report.
Bodies Corporate holding more than 50% in Indian cos
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