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Motilal Oswal reiterates 'BUY' on Ipca Laboratories with a price target of INR 1,600, citing better-than-expected Q2FY26 revenue, EBITDA, and PAT. The report highlights Ipca's consistent outperformance in the domestic formulation segment, its expansion into cosmetic dermatology, and expects strong revenue, EBITDA, and PAT CAGR through FY28.
Motilal Oswal has released a research report on Ipca Laboratories, maintaining a 'BUY' recommendation and setting a price target of INR 1,600. The report indicates that Ipca Laboratories delivered revenue in the second quarter of fiscal year 2026 (2QFY26) that exceeded expectations. Furthermore, its Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) and Profit After Tax (PAT) also surpassed estimates by a significant margin of 18% and 22%, respectively.\n\nThe improved profitability in 2Q was attributed to a favorable change in the company's product mix and effective cost-control measures. Ipca Laboratories is demonstrating robust growth, consistently growing at a rate higher than the industry average (IPM - Indian Pharmaceutical Market) in its domestic formulation (DF) segment. It has shown particular strength in both acute and chronic therapy areas within this segment.\n\nTo capitalize on promising growth prospects, Ipca Laboratories plans to add a new division focused on the cosmetic dermatology segment.\n\nMotilal Oswal forecasts a Compound Annual Growth Rate (CAGR) of 10% for revenue, 15% for EBITDA, and 20% for PAT between FY25 and FY28. The brokerage believes Ipca Laboratories is not only progressing well in its key markets like DF and export-generics/branded products but is also actively working to leverage synergies from its Unichem operations.\n\nImpact\nThis report, with its positive outlook and 'BUY' rating, could encourage investor confidence in Ipca Laboratories. Analysts and investors will closely watch the company's execution of its growth strategies, particularly the new cosmetic dermatology division and the integration of Unichem operations, to see if it meets the projected financial targets. The price target of INR 1,600 suggests potential upside for the stock.\nImpact Rating: 7/10\n\nDifficult Terms\nEBITDA: Earnings Before Interest, Taxes, Depreciation, and Amortization. A measure of a company's operating performance before accounting for financing and accounting decisions.\nPAT: Profit After Tax. The net profit a company has earned after deducting all expenses, interest, and taxes.\nDF: Domestic Formulation. Refers to pharmaceutical products manufactured and sold within the company's home country.\nIPM: Indian Pharmaceutical Market. The overall market size and performance of the pharmaceutical industry in India.\nCAGR: Compound Annual Growth Rate. The average annual growth rate of an investment over a specified period of time longer than one year.\nSynergies: The concept that the combined value and performance of two companies will be greater than the sum of the separate individual parts.\nUnichem operations: Refers to the business operations or assets acquired from Unichem Laboratories, which Ipca Laboratories is integrating.
