Hope of earnings recovery for Ipca Laboratories

Sorting out regulatory issues would lead to a re-rating

After gaining more than 22 per cent in the past week, Ipca Laboratories shed some of the gains on Monday. Investors, including mutual funds, have been buying the stock in the hope that the pressure on earnings has bottomed out and the inspections of its plants, as well as growth in the India business, would lead to upgrades. The stock had hit a peak of nearly Rs 900 in 2014 before correcting by over 40 per cent to the current levels, following import alerts imposed by the US FDA on its three key plants at Silvassa, Indore and Ratlam.

Nitin