Why Brokerages are Positive on IPCA Labs

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Why Brokerages are Positive on IPCA Labs

By Aditya Raghunath

Investing.com -- Brokerage firm Motilal Oswal Financial Services Ltd (NS: MOFS ) is very bullish on pharma company Ipca Laboratories Ltd. (NS: IPCA ). The firm has reiterated its ‘buy’ rating on the company and has given the stock a target price of Rs 2,480. The stock closed at Rs 2,142 on April 13. The target signifies an upside of over 15% from today’s close.

Motilal Oswal said, “IPCA has witnessed sustained growth momentum in the Pain segment. It has posted market share gains, on account of the pandemic, in products wherein smaller companies have been unable to meet supply requirements. Moreover, higher prescriptions for established brands such as Zerodol have enhanced growth prospects for IPCA in this segment.”

The brokerage firm also said that it expects IPCA’s API (active pharmaceutical ingredient) business, which contributes to 25% of the company’s sales, will continue its momentum for the next 3-5 years.

In its report on March 18, brokerage firm Sharekhan had also recommended a buy on IPCA with a target of Rs 2,560 on the stock. It said, “Ipca’s domestic formulations that account for around 45% of the overall top line of the company is on a strong footing to report double-digit growth over the next two years.” IPCA closed March 18 at Rs 1,864.6. It has gained almost 18% since the Sharekhan report.

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