Tue. Oct 20th, 2020

Fxtriangle | Market analysis | Managed trading

Fxtriangle will make Fx trading look easy.

IPCA’s Q1 show decent, but stock prices are riding on a wave of over-optimism

2 min read
IPCA

The growth in the domestic pharma market is rubbing off on IPCA Laboratories Ltd. Its stock is up about 86% since January this year as demand for hydroxychloroquine, considered among covid-19 drugs, jumped this year. Comparatively, the Nifty Pharma index is up 48%.

But even while its latest results have impressed the Street, the stock’s recent run-up should make investors wary. After a sharp run-up, the stock fell about 1.6% on Tuesday.

Of course, IPCA’s overall revenue growth is quite decent at 41% year-on-year (y-o-y). Its formulations business clocked a growth of 37%, which is quite good. The domestic market’s growth of about 8% is steady considering that there were supply disruptions due to covid-19.

IPCA’s formulation export growth was pretty much ahead of the Street’s expectations, though. Both generic and branded formulation exports have been impressive. Besides, institutional sales to governments have also shown a sharp growth this quarter. This business could slip in the coming quarters after institutions stockpile on drugs, say analysts.

The domestic active pharma business also got a bump up due to stock-buying by pharma companies. As a result, the active pharma ingredient segment posted a decent growth of about 72% y-o-y in the business.

Both the combination of sharp growth in revenues and cost-savings that is being seen in the pharma sector has proved to be a tonic for the company. Ebitda margins expanded sharply to 38.4% in Q1FY21 compared to 19% in the year-ago quarter. Ebitda is earnings before interest, tax, depreciation and amortization.

Leave a Reply

Forex trading and any instruments related to Foreign Exchange Market are Speculative and carry substantial risk of loss of either partial equity or the entire deposit amount. Leverage adds up to the risk, before considering to invest in this venture, you should first consider your financial position and may seek the help of an independent financial advisor. FXtriangle dis-recommends the usage of loan instruments to trade in this market as it can hamper financial position. Please do not invest the money that you cannot afford to lose. FXtriangle provides all its services throughout the Globe Excluding (Nigeria, British Virgin Island & the Islamic Republic of Iran) and also provides limited service in some jurisdictions where investment in Overseas markets / Fx Exchanges are prohibited by Law If you are not sure to contact us before using any of our services. FXtriangle acts as an Independent Corporate Financial Advisor and connects you to various overseas exchanges and cannot be held liable for any financial damage occurring through their side. All of our partnered institutions are regulated in various jurisdictions.FXtriangle conducts an independent background check before partnering with any institutions to fulfill your investment objectives smoothly. The usage of our Business name, Logo or any trademark in any financial forum, website, review website, complaint arena, Billboards without our written permission will attract lawsuits.