Buy This Multibagger Small Cap Pharma Stock, ICICI Direct Sees 33% Returns In 12 Months

ICICI Direct has a "buy" call for Indoco Remedies Limited with a target price of Rs 465 per share. According to the brokerage the stock is likely to jump around 33% from its current level considering the given target price.

Indoco manufactures and markets branded formulations and APIs for the domestic and export markets. In domestic formulations, through its nine marketing divisions, the company serves a range of specialties (acute heavy). Domestic formulations accounted for 54% of revenues. Major therapies are: respiratory, anti-infectives, stomatologicals, gastrointestinals and vitamins. Formulation exports accounted for 41% (regulated markets: 81%) of revenues while APIs contributed 4% with remaining coming from CRAMS.

Stock Outlook & Returns on Investments

The stock is currently trading at Rs 351 per share on NSE, 0.85% up as compared to its previous close. The stock opened at Rs 349.80 per share. It is a small-cap having a market capitalization of Rs 3,251.53 crore. The 52-week high was recorded on 30 December 2021 at Rs 459.25 and the 52 week low on 29 September 2022 at Rs 307.65, respectively.

The stock has given 3.56% negative returns in the past 1 week, whereas in the past 1 year, it has given 16.43% negative returns. It has given maximum returns in 3 years, around 143.03%. Whereas, in the past 5 years, it has given 25.58% positive returns.

Q2FY23 Results

Domestic formulations were down 2.4% YoY to Rs 208 crore (up 4.2% QoQ), export formulations were up 28.4% YoY to Rs 174 crore. Sales were up 12% YoY to Rs 433 crore. EBITDA was at Rs 88 crore, up 1.7% YoY with margins at 20.3%. PAT for Q1 was at Rs 49.7 crore (up 19% YoY).

Buy Indoco Remedies stock with a target price of Rs 465 per share

Indoco's share price has grown by ~2.4x over the past three years (from ~Rs 148 in November 2019 to ~Rs 348 levels in November 2022). "We maintain BUY on the back of 1) steady domestic business visibility, 2) strong exports guidance and 3) expected improvement in margins. We value Indoco Remedies at Rs 465 i.e. 16x P/E on FY24E EPS of Rs 28.9," the brokerage has said.

Disclaimer

The stock has been picked from the brokerage report of ICICI Direct. Greynium Information Technologies, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to check with certified experts before making any investment decision.