Shares of Ipca Laboratories surged 8 per cent and hit a fresh 52-week high of Rs 1,883.65 on the BSE on Friday in an otherwise range-bound market. With today's gain, the stock has rallied 9 per cent in the past three trading sessions.
In the June quarter of FY21, insurance companies raised stake in the company from 2.22 per cent stake, held at the end of Q4FY20, to 4.23 per cent. HDFC Life held 2.3 million shares, representing 1.82 per cent stake, while SBI Life held 1.4 million shares, representing 1.1 per cent stake, in the company at the end of June quarter, shareholding pattern data shows.
Among Mutual Fund investors, Axis MF Trustee Limited A/C Axis Mutual Fund A/C Axis Midcap Fund hiked stake from 1.68 per cent held at the end of Q4FY20 to 1.9 per cent at the end of Q1FY21. Besides, L&T Mutual Fund Trustee Ltd-L&T Mid Cap Fund upped its stake from 2.74 per cent to 3.34 per cent during the period under review. On the downside, DSP Samll Cap Fun trimmed stake from 5.63 per cent to 4.43 per cent; HDFC Trustee Company Ltd - A/C Hdfc Mid - Capopportunities Fund cut stake from 3.63 per cent to 3.45 per cent; UTI Equity Fund from 1.88 per cent to 1.78 per cent; IDFC Sterling Value Fund from 1.37 per cent to 1.27 per cent; and Canara Robeco Mutual Fund A/C Canara Robeco Emerging Equities from 1.13 per cent to 1.07 per cent. CLICK HERE TO SEE THE SHAREHOLDING PATTERN
According to analysts at Prabhudas Lilladher, Ipca Labs is a global leader in anti-malaria drugs especially in supplying AL (Non-dispersible) medicines for The Global Fund procurement scheme and private sector co-payment mechanism. "It also supplies AL dispersible and injectable. Global Fund had stopped buying its anti-malarial drugs from IPCA in FY17 due to regulatory issue and in FY18 IPCA was re-qualified. Currently, Anti-Malaria tender contributes 5 per cent to total revenue," it said in a report dated July 20. The brokerage has 'Buy' rating on the stock.
Those at Emkay Global, meanwhile, say that IPCA remains the fastest growing amongst the top-25 companies in domestic pharma led by superior execution in Zerodol and increased sales of HCQS. Overall, top 5 products (contributing 33 per cent of sales) are growing in excess of 40 per cent.
Ipca Labs is scheduled to report its June quarter earnings on August 10, 2020. According to Analysts at Phillip Capital, the company's revenues could grow 18 per cent year-on-year (YoY) to Rs 1,272.5 crore in June quarter of FY21. The EBITDA is seen improving 41 per cent YoY and 29 per cent QoQ to Rs 280 crore, while net profit is seen at Rs 196.5 crore, up 59 per cent YoY.
"Robust export opportunity and sustained domestic formulations to result in strong 18 per cent sales growth. Also stronger export demand in Hydroxychloroquine sulphate (HCQS) particularly compliments performance. In-line with robust operating performance, PAT is expected to report 59 per cent growth," it said in a results preview note.
Ipca Labs had been under investor’s radar as its key anti-malarial drug HCQ was seen as a drug of choice to combat Covid-19. HCQ sales in the first two months of Q1FY21 were upbeat with the company supplying Rs 42 crore worth tablets to the state governments.
At 11:33 am, the stock was quoting at Rs 1,860 apiece on the BSE, up 6.6 per cent, as against a 100-point (0.27 per cent) cut in the S&P BSE Sensex.