IPCA surges after string of broker upgrades

Shares of IPCA Laboratories gained 4 per cent to Rs 861.30 after Morgan Stanley initiated coverage on the company with a "buy" rating and a target price of Rs 1,101, calling it its "preferred healthcare mid-cap stock."

Morgan Stanley says that IPCA's growing India business, ramp-up in anti-malaria drugs and increased capacity for the US market should drive 23 per cent compounded annual growth in earnings until fiscal 2016, versus an average 16.3 per cent for other Indian healthcare stocks in its coverage.

IPCA has received a slew of recent upgrades from foreign banks, highlighting its improving outlook. Shares are up 18.7 per cent so far this year, compared with a 3.3 per cent gain in the BSE healthcare index and a 3 per cent rise in the BSE Sensex.

Last month, Credit Suisse initiated coverage on IPCA with an "outperform" rating, while CLSA upgraded the stock in January to "buy" from "outperform.

Copyright Thomson Reuters 2014