Pharma stock trading at a discount of 23% from the high, 400% dividend declared


With a market valuation of 22,006.03 Cr., IPCA Laboratories Ltd. is a large-cap business that operates in the pharmaceutical industry. Over 350 formulations and 80 APIs are produced by the pharmaceutical business IPCA for a range of pharmacological areas. With manufacturing leadership across more than 12 APIs, the firm is one of the largest suppliers of these APIs globally. Today, the company announced its Q2 financial results and a 400% dividend for its eligible shareholders.

The company has said today in a stock exchange filing that “We wish to inform you that, the Board has declared an interim dividend of Rs. 4/- per share (400%) for the financial year 2022-23. Kindly note that vide our letter dated November 2, 2022, we have already informed you that 23rd November, 2022 has been fixed as the Record Date for ascertaining the members entitlement of said interim dividend now declared which will be paid by the Company to the eligible shareholders on or before 7th December, 2022.”

For Q2FY23 and on a standalone basis, the company declared net sales of 1484.88 Cr compared to 1423.84 Cr in Q2FY22 and 1469.28 Cr posted in Q1FY23 representing a YoY growth of 4.28% and a QoQ growth of 1.06%. The net profit of the company declined 34.88% YoY to 167.78 crore in Q2FY23 from 257.64 Cr posted in Q2FY22 and on a QoQ basis the net profit climbed by 16.65% from 143.82 Cr posted in the quarter ended June 2022. The EPS stood at 6.61 per share in Q2FY23 compared to 5.67 in Q1FY23 and 10.16 in Q2FY22.

On a consolidated basis, the company declared revenue from operations of 1600.95 Cr in Q2FY23 compared to 1544.43 Cr in Q2FY22 and 1585.74 Cr in Q1FY23, representing a YoY growth of 3.65% and a QoQ growth of 0.95%. The company declared a net profit of 143.90 Cr in Q2FY23 compared to 143.06 Cr in Q1FY23 and 250.23 Cr in Q2FY22, representing a YoY fall of 42.49% and a QoQ growth of 0.58%. The EPS stood at 5.67 per share in Q2FY23 compared to 5.64 in Q1FY23 and 9.66 posted in Q2FY22.

The shares of IPCA Laboratories Ltd closed today at 865.00 apiece, down by 2.63% from the previous close of 888.35. In trade today the stock recorded a total volume of 782,521 shares compared to the 20-Day average volume of 220,772 shares. On the NSE, the stock had touched a 52-week-high of 1,128.50 on (10-January-2022) and a 52-week-low of 831.05 on (13-June-2022), indicating that at the current market price the stock is trading 23.34% below the high and 4.08% above the low. For the quarter ended September or Q2FY23, the company reported a promoter shareholding of 46.29%, FIIs stake of 10.57%, DIIs stake of 33.46%, a Government stake of 0.32% and a public stake of 9.34%.

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