India's Ipca Laboratories sinks to 3-yr low after Unichem Lab deal (updated)

Ipca Laboratories

25/04/2023 06:08

(Adds analyst comment, details)
       BENGALURU, April 25 (Reuters) - Shares of Ipca
Laboratories  IPCA.NS  fell as much as 9.1% to a near three-year
low on Tuesday, after it agreed to buy a 33.38% stake in Unichem
Laboratories  UNLB.NS  for up to 10.34 billion rupees ($126.3
million). 
    Ipca, which makes paracetamol tablets under the brand name
Pacimol, will also launch an open offer to Unichem's
shareholders to buy an additional 26% stake for 8.05 billion
rupees, according to a regulatory filing on Monday.
        The stock posted its biggest intraday loss in over eight
months before easing to trade down about 7.36% to 765.70 rupees,
as of 10:10 a.m. IST. It was the top loser in India's Nifty
pharma index  .NIPHARM , which is down 0.46%.
  
        "We believe the acquisition is expensive given increased
competition in the U.S. generics oral solids space, rising
regulatory risks, and strong efforts needed to turnaround
Unichem," Motilal Oswal said in a note. 
  
        The brokerage, which retains its "buy" rating on the
stock, said it awaits better clarity on measures to be
implemented by Ipca to "not only aid U.S. sales but also improve
margins of Unichem business over the stipulated time."
  
        The average rating of 21 analysts covering the stock is
"hold" and their median target price is 911 rupees, according to
Refinitiv data.
  
        
  
($1 = 81.8700 Indian rupees)

 (Reporting by Ashish Chandra in Bengaluru; Editing by Sonia
Cheema)
 ((ashish.chandra@thomsonreuters.com; +91 7982114624;))