IPCA Laboratories share price plunged over 8 percent on Friday after the Street sentiment in the pharma major turned negative due to a sharp drop in profit owing to higher input costs and the company management cutting margin guidance.
IPCA Labs' net profit dropped 53 percent to Rs 143.06 crore in the April-June 2022 quarter from Rs 306.6 crore from the corresponding period a year ago.
The company’s revenue from operations for the quarter ended June 2022 was at Rs 1,469.28 as compared to Rs 1,478.60 in the last quarter a year ago. Its net sales were up at Rs 1,585.74 crore versus Rs 1,565.79 crore in the corresponding period last year.
Brokerage firm Nomura has set a target price of Rs 1083. The firm noted that the key changes for IPCA are API growth at 5 percent as compared to 10 percent previously, institutional sales are expected to decline by 8-10 percent as compared to being flat earlier, and branded formulation exports growth at 13-15 percent, while it was above 20 previously, the firm said.
Investec has downgraded IPCA Labs to 'hold' and cut target to Rs 1,030 apiece from a previous Rs 1,185 per share, suggesting a downside of 13 percent as the pharma major has lowered FY23 margin guidance to 19 percent. Analysts at Investec, however, expect IPCA's FY24 margin to improve by 400 basis points.
Ipca is a fully integrated pharmaceutical company manufacturing and marketing over 350 formulations and 80 API's covering various therapeutic segments. The products of the Company are now sold in over 120 countries across the globe. It is a leading API manufacturer in India.
