Ipca Laboratories Limited

Healthcare — Drug Manufacturers - Specialty & Generic · NSE

₹1,845.50−₹67.60 (−3.53%)

DalalBaazaar Score

73 / 100

🟢 Good

Verdict

REASONABLE

Risk

Moderate

Driven by high debt relative to equity.

In simple words: Strong business and financial position, with both sales and profits growing well. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 8:26 pm

Understanding the Business

Company site ↗

The 60-second version of Ipca Laboratories Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Ipca Laboratories Limited, an integrated pharmaceutical company, manufactures and markets formulations and active pharmaceutical ingredients (APIs) for various therapeutic segments in India.

IndustryDrug Manufacturers - Specialty & Generic

SectorHealthcare

Employees17,210

Annual revenue₹9,563 Cr

How does it make money?

Turns over ₹9,563 Cr a year. Of every ₹100 of sales, about ₹12 reaches shareholders as profit, with ₹22 left at the operating level before interest, tax and depreciation. Each of its 17,210 employees supports ₹55.6 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹55.6 lakh

Who are its competitors?

The closest listed comparisons in its industry are SUN PHARMACEUTICAL IND L, DR. REDDY S LABORATORIES, CIPLA LTD, DIVI S LABORATORIES LTD. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?Some evidence

ROCE of 16.4% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

Peer median ROE14.5%

What is the outlook?

17 analysts covering the stock expect revenue to grow about 11.7% and earnings to grow about 17.4% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+11.7%

Est. earnings growth+17.4%

Analysts17

What has been driving growth?

Sales and margins have both contributed to where profit is now. Over 3 years revenue moved +54% while net margin moved +57% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+54%

Margin effect+57%

DalalBaazaar Score

73/ 100

Good

Weighted across six categories. Every point is explained below.

• P/E of 35.7x already prices in growth
✓ P/E is 41% below its own historical median of 60.3x — cheap by its own standards
✗ P/B of 5.81x is a steep premium to book

Quality vs. Valuation

Company Quality

80/ 100

Excellent

How good the business is, ignoring the share price entirely.

Valuation

57/ 100

Fair

What you are being asked to pay, ignoring how good the business is.

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

35.7x

3Y Median

60.3x

40 monthly readings · mean 58.4x · range 40.7x–78.6x

Sector Median

33.3x

median of 4 sector peers

🟢Current valuation is approximately 41% below its 3y median of 60.3x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

🟡Against its sector it is priced broadly in line with the peer median of 33.3x.

vs. its own history

Cheap

60.3x median over 40 months · -41%

vs. sector peers

Fair

33.3x median of 4 peers · +7%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

22.8x

PEG

1.04

What's Good / What's Bad

🟢 What's Going Well6

Margins are improving
EBITDA margin is up from 16.5% to 21.6% over 3 years.
Debt is being paid down
Total debt is down 45% over 3 years.
Cash generation is improving
Free cash flow is up 56% over 3 years.
Return on equity is rising
ROE has improved from 8.1% to 14.2%.
Return on capital is rising
ROCE has improved from 11.6% to 16.4%.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention0

Nothing stands out as clearly deteriorating on the years of data available.

Red Flags

3 items require attention · 2 high · 1 watch

🔴High leverageFinancial
Debt/Equity of 8.49x — earnings must service borrowings before shareholders see anything.
🔴Profit up while operating cash flow fallsFinancial
Reported profit rose but cash generated by operations declined — worth checking whether earnings are being supported by non-cash items or working capital.
🟡Receivables growing faster than salesFinancial
Receivables up 104% against revenue up 54% — sales are being booked faster than they are collected.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 16.5% to 21.6%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Deleveraging frees up earnings
Debt is down 45% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.
Priced below its own history
The stock trades 41% below its own median multiple. If the business performs as it has and simply re-rates back to normal, that gap is return on its own.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Leverage amplifies any setback
Debt/Equity of 8.49x. Interest is payable whether or not the business has a good year.
Sales are being booked faster than collected
Receivables are up 104% against revenue up 54%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
Several serious flags at once
2 high-severity checks triggered. Individually each has an explanation; together they raise the chance that something structural is wrong rather than a one-off.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1Revenue growth stays above 12% a year✓ 15.5% CAGR
Latest reported year was 20.8%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 20%✓ 21.6%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✓ ₹486 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.4x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 13%✓ 16.4%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

10 / 12 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✓ Strong return on capital employed (ROCE ≥ 15%)
✓ Healthy net margin (≥ 10%)
✓ Generates positive free cash flow
✗ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✓ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✓ Short-term technical trend isn't bearish

Price history

Quick Metrics

5 good · 4 neutral · 2 weak

Market Cap

₹46,821 Cr

Mid Cap

Mid-sized — more growth headroom, but sharper swings than large caps

P/E (Trailing)

35.7x

Fair

Fairly valued against the generic band

P/B Ratio

5.81x

Rich

Steep premium to book — needs high, durable returns to justify

EPS (TTM)

₹51.63

Profitable

Profitable on a per-share basis

ROE

14.2%

Moderate

Moderate capital efficiency

ROCE

16.4%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

8.49x

High

High leverage

Revenue Growth (YoY)

20.8%

Healthy

Healthy top-line growth

Profit Growth (YoY)

72.4%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.33%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

₹486 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

P/E (Forward)

26.2x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

20.0%

Good

Healthy core-business profitability

Net Margin

12.9%

Good

Strong bottom-line conversion

Current Ratio

2.76

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.04

Defensive

Steadier than the market

52W Range Position

76%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

1941.7 / 1915.0

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

24.0

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹6,207 Cr	₹7,622 Cr	₹8,855 Cr	₹9,563 Cr	+15.5%
EBITDA	₹1,026 Cr	₹1,391 Cr	₹1,827 Cr	₹2,070 Cr	+26.3%
EBITDA Margin	16.5%	18.2%	20.6%	21.6%	—
PAT (Net Profit)	₹471 Cr	₹547 Cr	₹738 Cr	₹1,141 Cr	+34.3%
EPS	₹18.58	₹21.57	₹29.08	₹44.98	+34.3%
ROE	8.1%	8.6%	10.6%	14.2%	—
ROCE	11.6%	11.2%	13.0%	16.4%	—
Total Debt	₹1,481 Cr	₹1,438 Cr	₹1,363 Cr	₹809 Cr	-18.3%
Free Cash Flow	₹311 Cr	₹533 Cr	₹546 Cr	₹486 Cr	+16.0%

🟢 Revenue has grown at 15.5% a year over 3 years.

🟢 EBITDA has grown at 26.3% a year over 3 years.

🟢 EBITDA Margin has risen from 16.5% to 21.6% over 3 years (+5.1 pts).

🟢 PAT (Net Profit) has grown at 34.3% a year over 3 years.

🟢 EPS has grown at 34.3% a year over 3 years.

🟢 ROE has risen from 8.1% to 14.2% over 3 years (+6.1 pts).

🟢 ROCE has risen from 11.6% to 16.4% over 3 years (+4.8 pts).

🟢 Total Debt has shrunk at 18.3% a year over 3 years.

🟢 Free Cash Flow has grown at 16.0% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹12,370 Cr

Total Liabilities

₹2,846 Cr

Cash & Equivalents

₹437 Cr

Operating Cash Flow

₹1,142 Cr

Capex

-₹656 Cr

Shareholding (proxy)

Institutional Holding

45.6%

Insider Holding

45.1%

Corporate Actions

Next Earnings

12 Nov 2026

Dividend Rate

₹6

Ex-Dividend Date

07 Aug 2026

Analyst Consensus

Recommendations

15 Buy · 2 Hold · 0 Sell

Target Price (Mean)

₹1,981.72

+7.4% vs CMP

Target Range

₹1,731 – ₹2,230

Peer Comparison

Company	P/E	ROE
SUN PHARMACEUTICAL IND L	34.9x	14.5%
DR. REDDY S LABORATORIES	31.0x	8.8%
CIPLA LTD	31.8x	9.8%
DIVI S LABORATORIES LTD	83.0x	17.5%

Recent News

4 mixed2 general

IPCALAB Outlook for the Week

Equitypandit, 09 Oct

Ipca surges 11% in tepid market, nears 52-week high on healthy Q1 results

Business Standard, 17 AugResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

Ipca Laboratories Rose 48% But The Hard Part Starts Here

Simply Wall Street, 03 Oct

IPCALAB Forecast — Price Target — Prediction for 2027

TradingView, 25 JunAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Ipca Laboratories shares gain over 2% to Rs 1,802.60

Moneycontrol.com, 13 AugPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Pharma stocks to buy ahead of Q2 results: Acutaas Chemicals, Mankind Pharma, Ipca Labs - Max upside? Target price

Livemint, 08 OctAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.
RSI is in oversold territory — could mean either a bargain or a stock still falling for good reason. Check the 'why' before assuming reversal.

DalalBaazaar Thesis

StrongBusiness Quality · Financial Health · Growth · Profitability

MiddlingValuation · Risk

Points for each in the Score ↑

Good business at a fair price

A sound business at a reasonable valuation. Suitable for a long-term holding, with the valuation and the direction of margins worth watching rather than the business itself. 2 high-severity red flags sit above this conclusion and should be read first.

All 5 tripwires holding · see Key things to watch ↑