Lupin Ltd. share price target

US sales cc quarterly run rate at its highest-ever level of US$ 235mn, expect to inch up to US$ 250mn in FY26E and US$ 280mn in FY27E

We maintain our BUY rating on the stock.

Lupin’s revenue beat our estimates (+3.1%) due to better-than-expected revenue in North America and India. EBITDA beat our estimates due to better-than-expected gross profit and lower-than-expected other expenses. Adj. PAT beat our estimates due to lower-than-expected depreciation expense.

In Teva’s litigation with Amneal which blocked Amneal’s launch of gProAir, the US Court of Appeals had recently asked Teva to delist its patents in contention. While the ruling was expected to clear the way for Amneal’s launch of gProAir, Teva has now filed a petition seeking an en banc rehearing.

LPC's domestic region in-licence portfolio fell from 15% in Q2FY24 to 12% in Q2FY25 and is expected to reduce further to ~10% by FY26

Lupin’s revenue was largely in-line with our estimates (+2.3%). EBITDA and Adj. PAT beat our estimates significantly due to lower-than-expected COGS and lower than expected other expenses.
We increase our FY2E6 EPS estimates to INR 79.7 (previously: 78.8) as we anticipate expanding respiratory portfolio in Europe, upcoming injectable launches include glucagon and dalbavancin, and GLP-1 launch in India in 2026E will drive growth.

We recommend a BUY rating with a target price of Rs 2,600/share.

Lupin’s 2QFY25 EBITDA/Adj PAT were 18%/26% ahead of our estimates (the magnitude of beat was broadly similar vs street estimates).

LPC's earnings were in line with our estimates but beat street's estimates. EBITDA margin was 23% in Q2FY25

LUPIN witnessed a strong 16.3% Y-o-Y (+12.9% Q-o-Q) rise in reported revenue to INR 56,003 Mn (vs. our estimate of INR 57,525 Mn) in Q1FY25.
Adj. net income grew at 242.8% Y-o-Y (+49.4% Q-o-Q) to INR 8,509 Mn (vs. our estimate of INR 6,151 Mn, a beat of 31.0%) in Q1FY25.

We have BUY on the Stock

Q1FY2025 numbers were strong, beating our estimates on all fronts. Sales grew by 16% y-o-y to Rs. 5514 crore (9% above our estimates), on a 28% y-o-y growth in North America region to Rs. 2041 crore.

LPC delivered a strong earnings beat in 1QFY25, led by a superior show in key markets (US/India), lower R&D spending and a low tax rate.

Lupin’s recent success in US (sales grew ~34% YoY in FY24) is driven by its better regulatory track record and traction in inhalation portfolio. Share of inhalation products has risen from 25% of US sales in FY22 (USD 185mn) to 40% in FY24
(USD 326mn) post the launch of gSpiriva. In India, growth had been subdued due to the discontinuation of in-licensed brands (contribution down from 15% in FY23 to 11% in Q4FY24).

Lupin reported a weaker quarterly revenue than expected. It reported 12.0% Y-o-Y (-4.6% Q-o-Q) rise in operating revenue to Rs. 49,608 Mn (estimated: Rs. 55,943 Mn) US market grew at 19.4% Y-o-Y (-1.4% Q-o-Q) to USD 209 Mn (estimated: USD 298 Mn), the third consecutive quarter of over USD 200 Mn revenue.

Lupin (LPC) delivered in-line operational performance in 4QFY24. LPC ended
FY24 on a strong note, with INR198b in sales (up 19% YoY), EBITDA margin of
18% (up 750bp YoY) and PAT of INR19b (vs. INR4b YoY). LPC continues to
implement efforts toward building a complex product pipeline in inhalation,
injectables and ophthalmics.

LPC delivered a healthy operational performance in Q4 with largely in-line revenue/PAT; higher tax impacted net profit