Ipca Laboratories (IPCA IN) – Q2FY26 Result Update – EBIDTA beat; Margin outlook strong – Upgrade to ‘BUY’
Published on 14 Nov 2025
We upgrade Ipca Labs (IPCA) from Accumulate to BUY given 1) recovery in API segment 2) higher margins ex Unichem 3) steady growth in domestic formulation and 4) attractive valuations.
Ipca reported strong EBITDA of Rs5.6bn (up 23% YoY) which was 6% above our estimates aided by Unichem and higher API sales. Q2 EBITDA for Unichem saw recovery QoQ. Export API business witnessed recovery in H1FY26 with 36% YoY growth. Domestic formulation business, which now contributes 40% of revenues and ~55% of EBITDA, continued to outperform and grow at healthy levels. At CMP, the stock is trading at 14.5x EV/EBITDA and 24x PE on Sept 2027E adjusted for Unichem stake. We upgrade stock to Buy from ACCUMULATE with revised TP of Rs1,600/share; valuing at 18x EV/EBITDA on Sept 2027E.
