India's IPCA Laboratories hits 2-1/2-yr low after analysts flag high opex concerns

Ipca Laboratories

17/02/2023 05:32

** Shares of pharmaceutical co IPCA Laboratories  IPCA.NS 
fall as much as 5% to 819 rupees, lowest since July 16, 2020
    ** Stock mark sharpest intraday pct loss since Nov. 11, 2022
    ** Analysts at Motilal Oswal said that co's Q3 margins was
dented by high opex, inferior product mix and slow pick-up in
active pharmaceutical ingredient (API) sales    
    ** Brokerage added it has cut its FY23/Fy24/FY25 EPS
estimates by 20%/14%/14% respectively, while maintaining "buy"
rating and reducing TP to 990 rupees from 1000 rupees
    ** Morgan Stanley flagged IPCA's high interest expense
during Q3, rating stock as "equal-weight" and TP of 1,096 rupees
    ** Brokerage Elara Capital too has slashed FY23E/24E
earnings 24%/11% on added cost pressure, but expects API/export
formulations to post 20%/14% revenue CAGR in FY23E-25E
    ** IPCA reported a 45.2% Y/Y decline in Q3 consolidated net
profit on Tuesday while its revenue rose 8.1%
    ** Share price trading below 50-day, 100-day and 200-day
moving averages, suggesting bearish trend
    ** More than 514,000 shares change hands by 10:48 a.m. IST,
2.5x 30-day avg of 206,481 shares
    ** 8 of the 21 analysts covering the stock have a "buy" or
"strong buy" rating, 9 have "hold" while 4 rate it at "sell" or
"strong sell"; median PT is 940 rupees - Refinitiv data
    ** Stock fell 22.2% last year
 (Reporting by Ashish Chandra in Bengaluru)
 ((ashish.chandra@thomsonreuters.com (+91 7982114624))