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Ipca releases quarterly financial report, reports net sale at Rs 8.3 bn

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The company reported a sustained growth in India formulations (up 10 per cent YoY) to Rs 3.5bn, while branded formulation exports rose by 24 per cent to Rs 946 mn

Ipca Laboratories has released its updated Q4Fy19 financial results, reporting sales to be at Rs 8.3 bn up by 9 per cent YoY, as against Rs. 8.6 bn estimated by the company. The company reported a sustained growth in India formulations (up 10 per cent YoY) to Rs 3.5bn, while branded formulation exports rose by 24 per cent to Rs 946 mn.

Export generics for the quarter shot up by 6 per cent YoY, however, the company continues to leverage its strength in the domestic business, which led to a strong gross margin of 67.7 per cent, according to a press release issued by Ipca.

The company also recorded a forex gain of Rs 94 mn, after adjusting for which, the EBITDA margin came in at 21 per cent (up 600bps YoY). PAT for the quarter came in at Rs 1.0 bn, owing to a margin of 13 per cent.

According to the press release, the company has gained from the growth in the API division (up by 10 per cent YoY), and the management remains positive on the API outlook. Institutional malarial business has reported sales of Rs 408 mn.

According to the press release, the company has started getting orders for the global tender business for injectable formulations. The management shared a positive outlook for the tender business based on approvals for new formulations. “We believe strong API capabilities are at the core of Ipca’s diversified exports business model, which, is a major competitive advantage, given the growing cost pressures in global generics. We believe the company is on track in its operating leverage growth story due to 1) normalizing domestic formulations and branded formulation exports, and 2) cost-efficiency measures and high capacity utilization,” stated the press release.

“We recommend ACCUMULATE on the stock with a revised TP of Rs 1030 on 20xFY21E EPS of Rs 51.5,” it added.

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