Ipca Laboratories (IPCA IN) – Q3FY26 Result Update – Margin surprise – BUY
Published on 17 Feb 2026
Ipca reported strong EBITDA of Rs5.3bn (up 19% YoY) which was 10% above our estimates. Company has witnessed 400bps GMs expansion ex Unichme for 9MFY26 which should sustain given product mix and softer raw material prices. Export API business witnessed recovery in 9MFY26 with 26% YoY growth. Domestic formulation business, which now contributes 40% of revenues and ~55% of EBITDA, continued to outperform and grow at healthy levels. We believe 1) recovery in API segment 2) higher margins ex Unichem 3) steady growth in domestic formulation are the key growth drivers. At CMP, the stock is trading at 15x EV/EBITDA and 24x PE on FY28E adjusted for Unichem stake. We maintain our “Buy” rating on stock with revised TP of Rs1,710/share; valuing at 17x EV/EBITDA on FY28E.
