Buy Ipca Labs, target of Rs 684: Angel Broking

Angel Broking has maintained its buy rating on Ipca Laboratories with a target price of Rs 684 in its May 29, 2009 research report.

“Ipca, a vertically integrated company with a geographically diversified business model, has grown at a steady pace in the past posting a CAGR of 17.3% in net sales during FY2005-08 primarily driven by its Domestic Formulation Segment. Going forward, we expect the next leg of growth for the company to come from its Export Segment as it leverages its API capabilities to create a sturdy business in the Regulated and Emerging Formulations market.”

“For FY2010, management expects top-line to grow 18-20% with OPM remaining steady at 20-21% levels. On the back of the same, we have upgraded our FY2010 net sales estimates resulting in an 8% upward revision of our net profit FY2010 numbers. We have also introduced our FY2011 numbers, wherein we expect the company to post 14.1% and 23.9% rise in net sales and Profit, respectively. Overall, we expect Ipca’s net sales and Adjusted net profit to post a CAGR of 16.9% and 29.4% respectively, over FY2009-11. At Rs 547, the stock is trading at 8.0x FY2010E and 6.4x FY2011E Earnings. We believe that the stock is trading at attractive valuations compared to its historical trading band. Hence, we maintain a buy on the stock with a target price of Rs 684,” says Angel’s research report.

source: Moneycontrol

Tags: angel broking, angle broking, india shaer, ipca labs, nse bse tips, share market, short term views

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