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Change in estimates
(| Crore) Old New % Change Old New % Change
Revenue 3,612.7 3,414.4 -5.5 4,075.1 3,872.6 -5.0 Reduced mainly due to likely GST implementation disruption in dometic market and
lower-than-expected sales in export generic segment in Q4FY17
EBITDA 581.0 488.2 -16.0 709.1 674.8 -4.8
EBITDA Margin (%) 16.1 14.3 -178 bps 17.4 17.4 2 bps Reduced FY18 margins as per management guidance
PAT 303.5 237.1 -21.9 392.1 369.0 -5.9
EPS (|) 24.1 18.8 -21.9 31.1 29.2 -5.9 Changed in sync with EBITDA
Source: Company, ICICIdirect.com Research
Assumptions
Current Earlier
FY16 FY17E FY18E FY19E FY18E FY19E Comments
Domestic formulations 1,209.0 1,361.5 1,484.6 1,662.8 1,561.0 1,779.5 Trimmed mainly due to GST impact estimated in H1FY18
Export formulations 918.0 995.9 1,039.5 1,226.3 1,164.7 1,316.1 Trimmed mainly due to lower-than-expected sales in Q4FY17 and currency impact in
UK
API 653.7 702.0 772.2 849.4 751.2 826.3
Source: Company, ICICIdirect.com Research
1898.9
2000
1500
1000
500
0
FY11 FY12 FY13 FY14 FY15 FY16 FY17E FY18E FY19E
Revenues
(| crore)
753.4
800 696.4
600
400
200
0
FY11 FY12 FY13 FY14 FY15 FY16 FY17E FY18E FY19E
Domestic Formulations
800 691.6
600
400
200
0
FY11 FY12 FY13 FY14 FY15 FY16 FY17E FY18E FY19E
Export Formulations
(| crore)
400
300
200
100
0
FY11 FY12 FY13 FY14 FY15 FY16 FY17E FY18E FY19E
APIs
(%)
400 12
289.6
300 10.0
8
200
100 4
0 0
FY11 FY12 FY13 FY14 FY15 FY16 FY17E FY18E FY19E
500 16.3 16
300 251.2
(%)
0 0
FY11 FY12 FY13 FY14 FY15 FY16 FY17E FY18E FY19E
Net Profit Net Profit Margins (%)
(%)
11.5
9.8
8.7
10
11.4 4.5
5 9.0
7.9
4.1
0
FY11 FY12 FY13 FY14 FY15 FY16 FY17E FY18E FY19E
1500
1000
500
0
Apr-11
Oct-11
Apr-12
Oct-12
Apr-13
Oct-13
Apr-14
Oct-14
Apr-15
Oct-15
Apr-16
Oct-16
Price 92.1x 74.7x 57.2x 33.9x 22.2x
[
100
80 46% Premium
60
(x)
40
20
0
Apr-11
Oct-11
Apr-12
Oct-12
Apr-13
Oct-13
Apr-14
Oct-14
Apr-15
Oct-15
Apr-16
Oct-16
Apr-17
30.0
(%)
400
300 20.0
200
10.0
100
0 0.0
Apr-15 Jul-15 Sep-15 Nov-15 Feb-16 Apr-16 Jul-16 Sep-16 Dec-16 Feb-17 Apr-17
Key events
Date Event
Apr-08 Receives WHO approval for its anti-malarial drug artesunate + amodiaquine. Ipca is the 2nd company globally to have pre qualification for the product.
Nov-08 Announces buyback offer for acquiring maximum 10 lakh (4% of total number of equity shares) shares from open market
Dec-09 Receives WHO pre-qualification anti-malarial finished dose combination formulations Artemether + Lumefantrine.
Mar-11 UKMHRA grants approval for SEZ manufacturing facility at Indore
Apr-11 Acquires UK based Onyx Scientific, a contract manufacturing company which is having a manufacturing facility in UK.
Jun-12 Receives USFDA approval to Indore SEZ
Nov-12 Voluntarily informs USFDA of a few non conformances at its Indore SEZ
Sep-13 Receives approval from the USFDA to launch products from Indore facility to the US market
Jul-14 Receives 483 from the USFDA for Ratlam (API) facility; volantarily shut downs its Ratlam (API) facility
Oct-14 Receives 483 from the USFDA for Pithampur (Formulations) facility; acquires manufacturing unit from Alpa Labs for | 71.7 crore
Jan-15 USFDA bans imports from Ratlam facility citing violations of standard production practices
Mar-15 Receives import alerts on Silvasa and Pithampur facilities from USFDA
Feb-16 Ipca receives warning letter from US FDA for Ratlam (Madhya Pradesh), SEZ Indore (Pithampur) and Piparia (Silvassa) manufacturing units
Apr-16 Global Fund to not source malaria drug from Ipca Labs as the company has received a warning letter from USFDA for three of its facilities.
Feb-17 USFDA clears Aurangabad intermediate plant without observations
Recent Activity
Buys Sells
Investor name Value ($) Shares Investor name Value ($) Shares
Kaygee Laboratories Pvt. Ltd. 80.0m 8.3m Norges Bank Investment Management (NBIM) -3.7m -0.5m
DSP BlackRock Investment Managers Pvt. Ltd. 10.5m 1.1m Axis Asset Management Company Limited -2.5m -0.3m
HDFC Asset Management Co., Ltd. 8.5m 0.9m SBI Funds Management Pvt. Ltd. -2.4m -0.3m
Tata Asset Management Limited 0.8m 0.1m Reliance Nippon Life Asset Management Limited -1.3m -0.2m
Exon Laboratories Pvt. Ltd. 0.4m 0.1m Columbia Threadneedle Investments (US) -0.4m 0.0m
Source: Reuters, ICICIdirect.com Research
Strong Buy: >15%/20% for large caps/midcaps, respectively, with high conviction;
Buy: >10%/15% for large caps/midcaps, respectively;
Hold: Up to +/-10%;
Sell: -10% or more;
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