Target: ₹1,720
CMP: ₹1,397.75
4QFY25 performance was broadly in line with expectations, although margin fell short by 130bp while EBITDA was 6 per cent below our estimate. The India business segment posted its ninth consecutive quarter of double-digit growth at 10.8 per cent y-o-y, below our 13.9 per cent estimate but above the industry growth of 8 per cent.
The market share in top-30 metro cities improved from 32.7 per cent in FY22 to 37.5 per cent in FY25. Export business witnessed strong growth, with 14 per cent QoQ and 10per cent YoY increase. The generics business grew by 7 per cent YoY and 10 per cent QoQ. In FY25, the South African market faced challenges due to tender losses while inventory rationalization impacted Australia and New Zealand.
We believe Ipca is well-positioned for sustained double-digit growth over the next few years driven by robust performance in its India and exports segments, market share gains in key metro cities and resilient generics business. Margin improvement in both – the base business and Unichem – is supported by cost synergy and efficient API sourcing.
We maintain our Add rating on Ipca with an unchanged target price of ₹1,720, while trimming our FY26F EPS by 5 per cent due to a revision in margin estimates.
Downside risk: Slower margin expansion in Unichem.