Brokerages Positive on IPCA Laboratories, Despite Tumbling Over 2%

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Brokerages Positive on IPCA Laboratories, Despite Tumbling Over 2%
Credit: © Reuters.

By Malvika Gurung

Investing. com -- The Indian pharmaceutical company Ipca Laboratories Ltd. (NS: IPCA ) was trading at Rs 2,097.30, down 2.6% at 3:25 pm on Wednesday, after reporting a decline in its profit after tax by 6.3% YoY at Rs 250.23 crore for the September-ending quarter on November 13.

While the shares of the pharmaceutical company tumbled over 2% on November 17, brokerage houses see an upside in the stock, led by a strong domestic business outlook and correction in raw material prices, among others.

The Mumbai-based pharmaceutical company has reported negative growth in consolidated income by 1.53 % sequentially at Rs 15,62.51 crore, while its net profit declined 6.3% YoY to Rs 250.23 crore. However, the company’s consolidated revenue rose 113% YoY to Rs 1,544.43 crore for the quarter in focus.

As IPCA Laboratories’ Q2 revenue was in line with the Street estimates, along with a strong outlook of the company’s domestic business looking upbeat, brokerage firm Jefferies has a ‘Buy’ call on the mid-cap pharmaceutical scrip, setting a target price of Rs 2,477/share, which is an 18% upside compared to the stock’s current market price.

Morgan Stanley (NYSE: MS ), on the other hand, initiated an 'equal-weight call on the stock, setting a target price of Rs 2,203/share, as the company currently faces near-term margin headwinds and below trendline sales growth, states the brokerage firm.

Emkay Global advises investors to ‘Hold’ the stock, with a target price of Rs 2,240/share and has estimated 1 year for the scrip to reach this price.

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