Indoco Remedies Q2 Results Review - Weak Quarter Led By Lower U.S. Sales: PL Capital

PL Capital Report

We cut our FY26/FY27E earnings per share by 19.3%/5.4% to factor in low margins and sales across regulated markets. Our numbers do factor in margin recovery with reduction in remediation cost from Q4 FY25. Indoco Remedies Ltd.’s Q2 FY25 Ebitda was much below our estimates due to muted U.S. sales and higher expenses. The OAI status for its Goa Unit 2 continues to restrict growth, especially for the U.S. markets.

At current market price, the stock is trading at 3.7 times enterprise value/domestic sales based on FY25E.

We expect 9% PAT CAGR over FY24-26E. We maintain our ‘Accumulate’ rating with target price of Rs 320 valuing at 20 times Sep FY26E EPS. Timely resolution of Goa facility Unit 2 is a key for re-rating.

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