IPCA Lab

Market Cap:  13,519 Cr.

Current Price:  1,070

Target : 1570 (46% Upside)

Stoploss : 900

52 weeks High / Low  1105.00 / 681.05

Book Value:  268.93

Stock P/E: 23.29

Dividend Yield: 0.28 %

ROCE: 16.24 %

ROE: 15.09 %

Face Value:  2.00

Debt to equity: 0.13

EPS:  45.76

Pledged percentage: 0.00 %

Promoter holding: 46.07 %

IPCA Lab Corporate Presentation for 2019-2020 (Click Here)

Future Growth Drivers

1.      The company introduced 24 new Brands / line extensions in the India market during 2018-19.

2.      Clinical research as a tool to launch innovative combination formulations / NDDS.

3.      Strong Brand building with focused promotion.

4.      In licensing/ out licensing to build business in the promoted therapy. Portfolio optimization, strategies to identify need gaps to build, enter, maintain and exit approach.

5.      Thrust on brand building in Pain, CVS, CNS, Anti-infective and Anti-malarial segments.

6.      Geographical expansion in covered countries through additional field force.

7.      Expansion in business lines - Institutions and Distributors.

8.      Introduction of new products - Existing developed formulations are identified for

9.      Dossiers developed by company approved in UK are being taken for registration in other EU countries.

10.  Most formulations registered to be backed by own API.

11.  Sale of generic dossiers with or without supply agreements.

12.  Contract manufacturing arrangements.

13.  Pursuing MNC tie-ups for supply agreements.

14.  Non-infringing process Patent filed for APIs.

15.  Own API manufacturing to back formulations, especially for the Generic market.

16.  Exploring strategic business relationship with smaller API manufacturers for

17.  Increasing product basket

Last Year’s Acquisitions

1.      Acquisition of 100% share capital of Pisgah Labs Inc., USA by Company’s subsidiaries for US$ 9.65 million free of debt.

2.      Acquisition of 80% share capital of Bayshore Pharmaceuticals LLC, New Jersey, and USA by Company’s wholly owned subsidiary for US$ 10.286millions.

3.      Acquisition of 100% share capital of Ramdev Chemical Private Limited (RCPL) for cash consideration of Rs. 108.50 Crs

Some Key Financials

1.      Total Income and Profit After Taxes for last 5 Years

2.      Domestic Sales Distribution

3.      International Sales Distribution

4.      Rupee Deployment

Why to Invest

1.      Good Profitable Company (In recent Quarter Consolidate Profit - 62%)

2.      Good RoE

3.      Virtually Debt Free Company

4.      No Pledge Share

5.      Multiyear Breakout (around 6 Years)

Weekly Chart - Multiyear Breakout

Monthly Chart - Flag Pattern

Market Outlook 2019

Market is move like pendulum. 

In 2017 - market give outperforming by 30%, 

Last year 2018 - range bound to negative, 

This year 2019 market may be negative for first half then start give upward move

In my last learning,(Link) we was already predicated that market is near to top in 10 Sept. month, From there within 40 days  - 

Nifty lose 1500 points from 11500  to 10000 and 

Sensex lose nearly 5000 points from 38300 to 33300 

This year Mega event is Election for Indian Central Government,

My assumption for nifty is now 10800, nifty is making Head and Shoulder,this make and break depend on this conclusion of this event.

1.      Market is in range bound range 10000-11200 and make base at 10000, so this call time correction
2.     Market move negative side first target is again 10000 and second target 82xx, so this called price correction. that shown in below figure

Nifty weekly Chart

Underperforming Sector

Banking, Auto, FMCG

Inline Sector

IT, Pharma

Outperforming Sector

Liquors, Chemical, Consumption Durable, New Theme (Like ethanol)