Ipca Labs shares hit lifetime high after Nomura raises target price

Ipca laboratories share price surged up to 3.66 per cent intraday, hitting their all time high at Rs 1509.45 per share on the BSE. Ipca labs share price moved up on Tuesday after the global brokerage firm, Nomura raised its target price from Rs 1,457 to Rs 1,750, implying a 20 per cent upside and maintaining a buy rating.  The stock is valued at 32.5 times its one-year forward (Sept-26) earning per share of Rs 54.

The brokerage firm said that given the rise in market valuation for peers, they expect Ipca to trade at 30-35x one-year forward earnings. The positive view on the stock is based on consistent outperformance in the domestic formulation market, analysts said. 

“The business attracts higher valuation multiple, and we believe it will contribute 50 per cent of FY26/27F EBITDA; scope for improvement in other business segments in the near to medium term, particularly in generics and API; and cost and revenue synergies at subsidiary Unichem in the near to medium term,” Saion Mukherjee and Amlan Jyoti Das of Nomura wrote in a report.  

Higher earnings growth 

Analysts at Nomura concurred that the pharma firm is estimated to grow its earnings at 30 per cent compound annual growth rate over financial year 2025-27, with this momentum expected to sustain beyond FY27. 

Further, Ebitda should touch 23.6 per cent by FY27, as Ipca makes investments in biologics and also intends to revive contract drug development and manufacturing (CDMO) aspirations which were impacted due to US FDA regulatory issues in the past. 

According to the company’s management, Ipca aspires to grow at 1.4x of pharma market growth in India and deliver 12 per cent growth in FY25, despite weak seasonal demand. 

The focus will be on scaling US revenues including from Unichem and Bayshore that can rise to $200 million in the near-term with new launches and tender wins. IPCA is exploring opportunities to compounding pharmacies as well; 3) ex-US generics, growth will be driven by new markets (e.g. Germany), the management said. 

Tha market capitalisation of Ipca Labs is Rs 40,809.55 crore, according to Bombay Stock Exchange (BSE).

Its shares are trading at a price to earnings multiple of 65.04 times with an earning per share of Rs 22.39. The 52-week high of the company’s share is Rs 1,509.45 while its 52-week low is Rs 886 a piece. 

At 10:29 PM, Ipca Labs shares were trading 2.17 higher at Rs 1487.70. In comparison, the BSE Sensex was trading 0.13 per cent higher at 85,038 levels.