Buy FDC, target price Rs 375: Centrum Broking

Centrum Broking has buy call on FDC with a target price of Rs 375. The current market price of FDC Ltd. is Rs 270.3.
Time period given by analyst is one year when FDC Ltd. price can reach defined target.

FDC Ltd., incorporated in the year 1940, is a Mid Cap company (having a market cap of Rs 4600.69 Crore) operating in Pharmaceuticals sector.

FDC Ltd. key Products/Revenue Segments include Formulations, Bulk Drugs, Export Incentives, Other Operating Revenue for the year ending 31-Mar-2021.


Financials
For the quarter ended 30-06-2022, the company reported a Consolidated Total Income of Rs 513.79 Crore, up 46.49 % from last quarter Total Income of Rs 350.72 Crore and up 9.16 % from last year same quarter Total Income of Rs 470.67 Crore. Company reported net profit after tax of Rs 70.66 Crore in latest quarter.

Investment Rationale
The brokerage believes as IPM is showing strong recovery in anti-infective segment, FDC’s domestic business should recover faster on a weak base. Beyond Covid-19, the brokerage expect domestic market to sustain early-mid double-digit growth. FDC has nearly 46% of India sales under price control. It needs to understand the US business outlook and the launch pipeline, as the business base has eroded meaning fully. Key risks to the call include any US base erosion or competition. At CMP of Rs273, the stock trades at 13.2x FY23E EPS of Rs20.6 and 11.7x FY24E EPS of Rs23.3. Maintain BUY on the stock.s

Promoter/FII Holdings
Promoters held 69.5 per cent stake in the company as of 30-Jun-2022, while FIIs owned 4.34 per cent, DIIs 6.08 per cent.