Ipca Laboratories’ stock fell 4% on May 31 as brokerages lowered their target prices due to the company’s weak performance in the March quarter.
For Q4, Ipca Labs reported a 34.5% year-on-year revenue increase to Rs 2,033 crore, up from Rs 1,512 crore last year. However, net profit dropped 22.2% to Rs 59.6 crore, compared to Rs 76.6 crore in the same period last year.
At 9:30 am, Ipca Labs’ stock was trading at Rs 1,217.55 on the NSE, down 2.55% from the previous session.
Motilal Oswal cut its earnings estimates for FY25 and FY26 by 12% and 14%, respectively, due to a slow recovery in the US market, challenges in branded generic exports, and slower growth in acute therapies. The brokerage set a new target price of Rs 1,140 per share and maintained a neutral rating, implying a 9% downside.
Nuvama Institutional Equities reduced its target price to Rs 1,438 from Rs 1,480 but kept a buy rating, citing management’s positive margin outlook. The management expects margins to reach 18% in FY25 and grow to about 21% by FY27. They also foresee a 24-25% EBITDA margin over the next six to seven years, leading to a 20-25% CAGR in EBITDA.
In the past year, Ipca Labs shares have risen 70%, compared to a 22% increase in the Nifty 50 index.
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