Ipca Laboratories ↗

The company’s liquid investments continue to remain strong,with cash and liquid investments of around ₹1,359 crore as on March 31, 2022.

The ratings also factor in strong liquidity in the form of cash and liquid investments to the tune of around Rs. 920crore at the end of June 30,2021 along with about 60% of unutilized working capital bank lines.

Comfortable financial risk profile and strong liquidity Ipca’s capital structure continues to remain healthy with overall gearing at 0.07x as on March 31, 2021 vis-à-vis 0.14x as on March 31, 2020 mainly due to accretion to reserves and repayment of term loan as per schedule.

As a result, average working capital utilization stands comfortable at 36% for last 12 months ended June 2021. 2 CARE Ratings Limited Press Release Intense competition and pricing pressures Roughly 70% of Ipca’s revenue is derived from formulations, with Pain management, cardio and anti -diabetics and anti malarials being the leading therapies.

IPCA’s capital structure continues to remain healthy with overall gearing at 0.14x as on March 31, 2020 vis-à-vis 0.16x as on March 31, 2019 mainly due to accretion to reserves and repayment of term loan as per schedule.

As a result, average working capital utilization stands comfortable at 41% for last 12 months ended December 2020.

Liquidity: Strong Liquidity is marked by strong accruals; and liquid investments to the tune of Rs.787 crore as at December 31, 2020.

Comfortable financial risk profile: Capital structure continues to remain healthy with overall gearing at 0.18x as on March 31, 2019 vis-à-vis 0.26x as on March 31, 2018 mainly due to accretion to reserves and schedules repayment of term loans.

As a result, average working capital utilization stands comfortable at 45% for last 12 months ended October 2019.

Liquidity: Strong Liquidity is marked by strong accruals (Rs. 612 crore in FY 19) and liquid investments to the tune of Rs.293 crore as on September 2019.

Against these, IPCA acquired Ramdev Chemicals for a cash consideration of Rs. 108 crores in April 2019.

Similarly, PAT also more than doubled during the same period from Rs.76 crore to Rs.185 crore. 1 Complete definition of the ratings assigned are available at www.careratings.com and other CARE publications 1 CARE Ratings Limited Press Release Comfortable financial risk profile: Capital structure continues to remain healthy with marginally improving trend at 0.26x as on March 31, 2018 vis-à-vis 0.31x as on March 31, 2017 mainly due to accretion to reserves and schedules repayment of term loans.

Liquidity Ipca’s liquidity indicator derives comfort from cash and bank balance of Rs.134 crore and investments in mutual funds of Rs.30 crore, as on September 30, 2018.

Furthermore, on consolidated basis it has cash and bank balance of Rs.150 crore and investments in mutual funds of Rs.69 crore, as on March 31, 2018.

Besides, average working capital utilization (sanctioned limits of Rs.1,140 crore) stands at only 27% for last 12 months ended August 2018, signifying adequate cushion.

As a result, average working capital utilization stands comfortable at 27% for last 12 months ended August 2018.

Though the company had significant repayment obligations in the near term, the net debt of the company was approximately Rs.700 crore and Ipca maintains cash reserves of Rs.100 crore and above as a cushion for debt repayment at all times.