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Ipca Earnings Soar 19% Year-on-Year
18 Feb
Summary
- EBITDA surged 19% year-on-year to ₹530 crore, exceeding estimates.
- Gross margins expanded significantly, driven by product mix and lower raw material costs.
- A 'Buy' rating is maintained with a revised target price of ₹1,710 per share.
Ipca showcased a robust financial quarter, with its EBITDA reaching ₹530 crore, marking a 19% increase year-on-year and exceeding analyst estimates by 10%. Revenue stood at ₹2,400 crore, a 6.6% rise, aligning with projections. The company experienced a notable 400 basis points gross margin expansion for the first nine months of fiscal year 2026, excluding Unichem's impact. This improvement is expected to persist due to an optimized product mix and softening raw material prices.
Consolidated gross margins saw a 230 basis points enhancement, reaching 72.5%. While the company recorded a minor forex loss, adjusted EBITDA, excluding forex effects, grew 19% to ₹530 crore. Excluding Unichem, EBITDA growth was an impressive 35%, with an operating profit margin of 25.9%. Net profit surged 31% to ₹310 crore.
Key growth drivers identified include the recovery in the API segment, higher margins outside of Unichem, and steady domestic formulation growth. Consequently, a 'Buy' rating has been reaffirmed for the stock, with an adjusted target price of ₹1,710 per share, valued at 17 times EV/EBITDA on FY28E projections.
