Ipca Labs: Nomura Hikes Target to ₹2,060 on Strong Q1FY27

Ipca Laboratories has seen its stock climb 36% over the past year, leading Nomura to raise its target price and reaffirm a ‘Buy’ rating. Analysts Saion Mukherjee and Kushal Chovatia from Nomura set a September 2027 target price of ₹2,060, up from ₹1,900, indicating a potential 19% upside.

This upward revision follows Ipca Labs’ stronger-than-expected Q1FY27 financial results. The company reported significant year-on-year growth across key metrics, demonstrating robust operational performance.

Q1FY27 Performance Highlights

• Revenue increased by 21% year-on-year.
• EBITDA rose by 50% year-on-year.
• Net profit surged by 72% year-on-year.

The company achieved broad-based growth across all its business and geographic segments, with particularly strong contributions from its API and export divisions. Ipca also effectively passed on higher raw material costs and implemented price increases within its India and international branded generics businesses.

Revised Guidance and Estimates

Following these strong quarterly results, Ipca’s management upgraded its guidance for FY27. Revenue growth is now anticipated to be between 14-16%, an increase from the earlier projection of 12-13%.

• EBITDA margin target raised to approximately 23% from 22%.

Consequently, Nomura has adjusted its FY27/FY28 sales estimates by approximately 2.5%, EBITDA estimates by 9%, and PAT estimates by 13%. This reflects the improved momentum and the company’s updated guidance.

Nomura anticipates India formulation sales to sustain low-teens growth in the coming periods. The brokerage projects EBITDA margins to reach 23% in FY27, 24% in FY28, and 24.8% in FY29, with management suggesting a potential 25-26% margin over the next two years.

Valuing Ipca at 27.5 times its September 2028 earnings, Nomura maintains its ‘Buy’ call. This decision is underpinned by the company’s strong earnings momentum and consistently improving margin profile.