Ipca Labs jumps 7% after Q2 results; buy, sell or hold? Analysts suggest

Ipca Laboratories share price was trading 6.2 per cent higher at ₹1,382.60 compared to previous session's close of ₹1,302 on the NSE

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Ipca Labs share price today: Shares of multinational pharmaceutical company Ipca Labs surged nearly 7 per cent to hit an intraday high of ₹1,389 per share on the National Stock Exchange (NSE) after the company's earnings for the July-September quarter of fiscal 2026 (Q2FY26) came in line with the market estimates. 

 

At 12:00 PM, the company's share price was trading 6.2 per cent higher at ₹1,382.60 compared to previous session's close of ₹1,302 on the NSE. In comparison, the NSE Nifty50 was down 0.34 per cent at 25,792.45 levels. The market capitalisation of the company stood at ₹35,054 crore. The stock has recovered around 19 per cent from the 52-week low of ₹1,168.2 touched on April 7, 2025.

Ipca Laboratories Q2 results

In the Q2FY26, Ipca Laboratories reported net profit of ₹282.6 crore, up 23.1 per cent year-on-year (Y-o-Y) from ₹229.4 crore in the year-ago period. The company's revenue grew 8.6 per cent Y-o-Y to ₹2,556.5 crore in the September quarter against ₹2,354.9 crore in the year-ago period.

 

Earnings before interest, tax, depreciation, and amortisation (Ebitda) increased 25 per cent Y-o-Y to ₹545.5 crore, while margins expanded to 21.33 per cent from 18.75 per cent in the year-ago period. Consolidated net total income stood at ₹2,584.36 crore, up 9 per cent from ₹2,354.9 crore in the corresponding quarter of the previous fiscal. 

 

Ipca's Indian formulations segment grew 8 per cent Y-o-Y to ₹1,018.9 crore, while export income increased 7 per cent to ₹813.65 crore.  

Analysts on Ipca Laboratories Q2 results

According to analysts at Motilal Oswal Financial Services (MOFSL), Ipca Laboratories delivered slightly better-than-expected revenue in Q2FY26, while Ebitda and PAT came in better-than-estimates by 18 per cent and 22 per cent, respectively. Segmental mix and cost-control measures led to improved profitability in September quarter, the brokerage said. 

 

"Ipca is consistently growing at a higher rate than the industry (IPM) rate in the domestic formulation (DF) segment. Notably, it outperformed IPM in acute and chronic therapies. On promising growth prospects, IPCA would be adding one division in the cosmetic dermatology segment," the brokerage said.

 

However, excess inventory of certain products impacted the generics exports formulation business in H1FY26, which is expected to revive in the coming quarters. 

 

MOFSL has raised its earnings estimates by 6 per cent/3 per cent/3 per cent for FY26/FY27/FY28, factoring in sustained industry-beating growth in the branded DF segment, improvement in profitability of Unichem operations, and a gradual recovery in generics exports business.

 

The brokerage has maintained a 'Buy' rating on the stock with a target price of ₹1,600, citing the company's progress in its focus markets of DF and exports, as well as its efforts to build synergy from Unichem operations. 

 

While revenues and PAT were in line with expectations, Ebitda beat JM Financial's estimates by 13 per cent. The brokerage said the improvement in margins came on the back of changing product mix, where higher-margin products, particularly in the chronic segment, contributed positively.

 

According to JM Financial, revenue, Ebitda, and PAT are projected to post a compound annual growth rate (CAGR) of 12 per cent, 22 per cent, and 37 per cent, respectively, over the next three years. Legacy categories such as Cardiac and Pain are expected to drive domestic momentum, while a rebound in the US market should support growth in export formulations.

 

The brokerage notes that the stock has already declined 16 per cent from its July 2025 peak and is currently valued at 25x/20x FY27/FY28 EPS, reflecting a 14 per cent/18 per cent discount to the sector average. JM Financial believes this discount is unwarranted, given the company’s strong performance in its India operations. On this basis, JM Financial has assigned a valuation multiple of 28x, arriving at a target price of ₹1,730 and reiterating its 'Buy' recommendation.