IPCA Lab (NSE Cash) - BUY
490 - 484
2015, the stock has
corrected significantly from the high of
887. During last month, the stock halted its
corrective move near 161.8% retracement
of the previous up leg.
At the mentioned support, the stock has
formed a ‘Upward Bar Reversal’ on
This indicates reversal of the trend and
thus we are expecting upward retracement
of the corrective downmove.
The ‘Stochastic’ indicator on monthly
charts is in oversold zone and has given
positive crossover from its average.
Also, the ‘SuperTrend’ indicator on daily
charts is in ‘Buy’ mode, which support our
bullish view on the stock.
Thus, the stock can be bought from current
level to a decline up to
for a target
560 in coming three months. A stop
loss can be placed at
Source: Falcon ( Chart time: 13:45 IST on 20/07/2016 )
July 20, 2016
Domestic formulations business - the cash cow:
Ipca has been successful in
changing its business focus to the high-margin chronic and lifestyle segments from the
low-margin anti-malarial segment. The chronic and lifestyle segments, comprising CVS,
anti-diabetics, pain-management, CNS and dermatology products, constitute more than
50% of the company’s domestic formulation sales. With an expected pick-up in sales in
FY2017, we expect the domestic formulation business to grow at a CAGR of 16.2% over
Exports currently under pressure; should pickup only by FY2018:
After the USFDA
52 week high/low
inspection at Ratlam, the company received certain inspection observations in Form 483,
consequent to which the company voluntarily decided to temporarily suspend API
Avg. Daily Volume
shipments from this manufacturing facility to the US markets until the issue gets resolved.
However, the 483 was converted into an import alert. The company’s Silvassa and Indore
Face Value (
facilities are also under import alert. These developments impacted FY2015 sales, while
FY2017/FY2018 should see some revival. We expect exports to grow at a CAGR of
15.0% over FY2016-18E.
Shareholding Pattern (%)
We expect net sales to post a 15.6% CAGR to `3,799cr, and EPS to register a
36.5% CAGR to ` 19.7 over FY2016-18E. The company’s financials will be impacted by
the USFDA import alert on the Ratlam, Indore and Silvassa facilities. While the problems
are likely to persist for a while, we expect a gradual pick-up in performance only by
FY2018. Still, given the valuations, we maintain our Buy rating.
MF / Banks / Indian Fls
OPM PAT EPS ROCE ROE
FII / NRIs / OCBs
Indian Public / Others
July 20, 2016
Research Team Tel: 022 - 3935 7600
Angel Broking Private Limited (hereinafter referred to as “Angel”) is a registered Member of National Stock Exchange of India Limited, Bombay Stock Exchange Limited and
Metropolitan Stock Exchange Limited. It is also registered as a Depository Participant with CDSL and Portfolio Manager with SEBI. It also has registration with AMFI as a Mutual
Fund Distributor. Angel Broking Private Limited is a registered entity with SEBI for Research Analyst in terms of SEBI (Research Analyst) Regulations, 2014 vide registration number
INH000000164. Angel or its associates has not been debarred/ suspended by SEBI or any other regulatory authority for accessing /dealing in securities Market. Angel or its
associates/analyst has not received any compensation / managed or co-managed public offering of securities of the company covered by Analyst during the past twelve months.
This document is solely for the personal information of the recipient, and must not be singularly used as the basis of any investment decision. Nothing in this document should be
construed as investment or financial advice. Each recipient of this document should make such investigations as they deem necessary to arrive at an independent evaluation of
an investment in the securities of the companies referred to in this document (including the merits and risks involved), and should consult their own advisors to determine the
merits and risks of such an investment.
Reports based on technical and derivative analysis center on studying charts of a stock's price movement, outstanding positions and trading volume, as opposed to focusing on a
company's fundamentals and, as such, may not match with a report on a company's fundamentals. Investors are advised to refer the Fundamental and Technical Research
Reports available on our website to evaluate the contrary view, if any.
The information in this document has been printed on the basis of publicly available information, internal data and other reliable sources believed to be true, but we do not
represent that it is accurate or complete and it should not be relied on as such, as this document is for general guidance only. Angel Broking Pvt. Limited or any of its affiliates/
group companies shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report.
Angel Broking Pvt. Limited has not independently verified all the information contained within this document. Accordingly, we cannot testify, nor make any representation or
warranty, express or implied, to the accuracy, contents or data contained within this document. While Angel Broking Pvt. Limited endeavors to update on a reasonable basis the
information discussed in this material, there may be regulatory, compliance, or other reasons that prevent us from doing so.
This document is being supplied to you solely for your information, and its contents, information or data may not be reproduced, redistributed or passed on, directly or indirectly.
Neither Angel Broking Pvt. Limited, nor its directors, employees or affiliates shall be liable for any loss or damage that may arise from or in connection with the use of this
Disclosure of Interest Statement
1. Financial interest of research analyst or Angel or his Associate or his relative
2. Ownership of 1% or more of the stock by research analyst or Angel or associates or relatives
3. Served as an officer, director or employee of the company covered under Research
4. Broking relationship with company covered under Research
July 20, 2016