Indoco Remedies Q1 Review - U.S., India Offer Double Pivot For Growth: Prabhudas Lilladher

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Prabhudas Lilladher Report

Indoco Remedies Ltd. maintains robust guidance in U.S. generics with growth of 67%/24% in FY22E/FY23E.

Its business expansion will drive 25% plus growth in Europe.

We note that India formulation sales growth of more than 17% with revenue contribution of 55-60% will have multiplier benefit on sales and headline margins going forward.

This along with strong and sustainable growth in U.S. will improve Ebitda margin from 15-16% to 18-20% in FY22E/23E.

We maintain our positive outlook on Indoco Remedies as we believe that-

1. Medical representative productivity would improve to Rs 3lakhs/month along with existing field force,

2. India formulations growth to return to more than 15% on sustainable basis,

3. U.S. launch of ophthalmic and oral abbreviated new drug applications in partnerships and

4. there will be lower remediation cost, as regulatory issues are resolved.

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